Tokyo police arrested the president and two other former executives of the failed cattle outfit Agura Bokujo on Tuesday for allegedly soliciting investors based on misleading information before the operation went under in 2011.
Ex-President Kumiko Mikajiri, 69, and the two others were arrested in connection with a cattle-breeding scheme affecting about 73,000 investors nationwide.
Investigative sources said the firm gave investors false information, including inflating the number of cattle raised at the farm.
Agura Bokujo, based in Tochigi Prefecture, went bankrupt in 2011 with about ¥433 billion in total liabilities, owing roughly ¥420.7 billion of that to the 73,000 investors.
Under the scheme, investors purchased female cows from Agura Bokujo, which would continue to raise the animals and buy them back several years later, for about ¥3 million to ¥5 million per head.
Agura Bokujo filed for court-guided rehabilitation in August 2011, blaming the eruption of the nuclear crisis at the Fukushima No. 1 power plant in March 2011 for prompting a rise in canceled contracts after radioactive elements were detected in beef.
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