Failed bedding supplier L&G K.K., which allegedly ran a huge Ponzi scam for which its top executives were arrested Thursday, planned to issue another quasi-currency dubbed the "wonten" in South Korea similar to its "enten" in Japan before it collapsed in 2007, sources said Friday.
L&G Chairman Kazutsugi Nami, 75, and around 20 L&G executives were arrested Thursday on suspicion of defrauding investors. The wonten plan was apparently aimed at finding a way to survive overseas after encountering cash-flow problems in Japan, the sources said.
Although the company set up an affiliate there, with Nami's ex-wife assuming the presidency, the South Korea plan ultimately failed, they said.
According to documents distributed to its executives and investors, Nami had concocted a "World Economic Enten Plan" in which the company would persuade countries around the world to adopt its quasi currency. The plan for South Korea was to begin issuing wonten in February 2007.
The South Korean affiliate participated in a company-sponsored bazaar in Yokohama in May 2007 and used enten, the domestic version of the company's quasi-currency, to sell watches and other goods there. Nevertheless, the South Korean version of enten never got off the ground.
Nami and others stand initially accused of collecting ¥118 million from six clients between July and December 2006 despite knowing they could not deliver the investment returns they promised, police said.