Prosecutors on Thursday arrested a businessman on suspicion of evading corporate taxes on the profit when major temp staffing agency Goodwill Group Inc., now known as Radia Holdings Inc., took over another staffing agency.
The suspect was identified as Kazutaka Kito, 35, a former executive of the Tokyo-based investment firm Corinthian Partners.
The Tokyo District Public Prosecutor's Office alleged that Kito evaded corporate taxes totaling about ¥1.67 billion.
Investigators also have an arrest warrant for Hideo Nakamura, 52, a certified public accountant who was a former head of Corinthian Partners. He has fled abroad.
Kito allegedly did not declare about ¥5.59 billion in profit in the business year through April 2008 in conspiracy with Nakamura.
Investment industry sources said Kito and Nakamura used a now-defunct investment fund run by Corinthian Partners to mediate Goodwill Group's takeover of Crystal Co., now Radia Holdings Premier Inc., in 2006.
The undeclared income was part of the profit the suspects earned through the mediation, the sources said.
The fund that mediated Goodwill Group's takeover of Crystal raised ¥88.3 billion in investment from Goodwill Group and purchased about 91 percent of Crystal's shares from its founder for ¥50 billion, the sources said.
The fund sold about 67 percent of the shares it acquired to Goodwill Group, posting ¥38.3 billion in profit, leaving 24 percent of the shares in the hands of the two suspects, they said.
Nakamura left Japan in early July before the prosecutors launched their investigation. They searched locations related to Nakamura on Oct. 14.