Nearly 20 offices, including the head office, of Kinmirai Tsushin Inc., an Internet protocol telephony service provider, have been searched following allegations that it lured and defrauded investors with talk of new technology and lucrative returns.
Kinmirai Tsushin is one of numerous telecommunication firms that have mushroomed since the deregulation of the telecommunications sector in Japan. As of October, there were some 13,700 such companies, up about 500 from last year.
Kinmirai Tsushin spread its name via a massive public relations campaign. It invited people to invest at least 10 million yen to become an owner of a communications server, or relay station, explaining that they would receive nearly 1 million yen in monthly dividends from returns on service charges after one year and thus recoup their investment in a few years.