A slush-fund scandal has hit the construction industry again. Tokyo public prosecutors on Tuesday arrested the president of Nishimatsu Construction Co. on suspicion of instructing a former vice president and three others to bring ¥70 million into Japan without reporting it to customs authorities between February 2006 and August 2007. The president stepped down from his position on the same day he was arrested.
Investigators say the former vice president and the three suspected accomplices, who were arrested Jan. 14, had actually brought in ¥100 million since October 2005 but that the statute of limitations expired on ¥30 million of the amount.
This is only part of the story. Nishimatsu is suspected of having created a ¥1 billion slush fund by receiving kickbacks from business partners and subcontractors linked to its overseas operations. The ¥100 million is thought to be part of the slush fund. Nishimatsu may have chosen to collect money abroad, thinking it would be difficult for investigators to detect. Investigative authorities need to find out, first, what Nishimatsu used the ¥100 million for.