Tokyo prosecutors charged a former Kanebo Ltd. president and a former vice president Thursday with issuing falsified financial statements in violation of the Securities and Exchange Law.

Indicted were Takashi Hoashi, 69, the former president, and Takashi Miyahara, 63, the former vice president. They have basically owned up to the charges, sources said.

Hoashi and Miyahara were freed later in the day on bond.

The prosecutors decided not to indict Kanebo, considering that it is under rehabilitation, and ex-Managing Director Kenzaburo Shimada, 59, who was arrested in July along with Hoashi and Miyahara.

The now-delisted firm said it takes the indictments “solemnly and seriously” and apologized to its customers, shareholders and others concerned.

Investigative sources alleged Hoashi and Miyahara covered up a capital deficit of 81.9 billion yen in fiscal 2001 and 80.6 billion yen in fiscal 2002 on a consolidated basis, and issued falsified financial statements showing excess assets.

In fiscal 2001, they allegedly falsified the firm’s statement to show it had 700 million yen in profits despite posting a 6.4 billion yen loss. It is believed they made more than 1 billion yen in backdoor money by reporting false expenses, but only some of its use has become known.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.