OSAKA (Kyodo) Officials of Best Denki Co., printer Wellco Corp. and a support group for the disabled were arrested Thursday on suspicion of using a postal discount system reserved for the disabled to mail ads for the major electronics discount chain at a reduced rate.
Osaka prosecutors are expected to turn up other major firms involved in illicitly using the system to send more than 10 million pieces of direct mail.
Prosecutors Thursday raided the headquarters of Best Denki in Fukuoka Prefecture, the Tokyo sales department of Ishikawa Prefecture-based Wellco and other locations.
Those arrested include Toshiharu Kubo, 51, Best Denki’s former senior sales-promotion official, Wellco Chairman Kazuyoshi Wakabayshi, 57, and Yoshikuni Morita, 69, the head of the Bunkyo Ward, Tokyo-based Hakusan-kai support group for the disabled. They are suspected of violating the Mail Law by ordering the use of the discount system.
Nobuyuki Itagaki, 47, an executive of Hakuhodo Erg Inc., a subsidiary of major advertising agency Hakuhodo Inc., was also taken into custody, the prosecutors said. Ten people have been arrested in the case, including two who were served new warrants.
The Mail Law allows disabled groups to be charged a lower postal rate under certain conditions, including when a periodical is issued three or more times a month and has a circulation of at least 500.
According to company sources, Wellco, in cooperation with an Osaka ad agency, enclosed periodicals from Hakusan-kai and others in some 11 million pieces of Best Denki direct mail between August 2005 and February 2008 to take advantage of a direct-mail rate of around ¥8, rather than pay the normal ¥120 rate.
Hakuhodo Erg served as a middleman for Wellco and Best Denki, the sources said.
Both firms are listed on the Tokyo Stock Exchange.
About 2 million pieces of direct mail sent around February 2007 are directly related to the allegations in the case, investigative sources said. The firms are believed to have evaded paying at least ¥200 million by using the discount system.
Hakusan-kai’s head is an acquaintance of Yoshio Maki, a Lower House member of the Democratic Party of Japan.
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