TOKYO (TR) – On Friday, Tokyo Metropolitan Police re-arrested the former president of a long-established bearing trading company and two others on suspicion of defrauding Mizuho Bank out of hundreds of millions of yen in loans. The development is the latest in an investigation that has uncovered suspected fraud in the billions of yen, some of which was earmarked for the purchase of real estate and leasing o luxury vehicles. Long-running bearing trading company Horimasa Kogyo is in the middle of bankruptcy proceedings.
The three suspects are former president Masaharu Hori, 69, former general affairs manager Shigeyasu Okuma, 73, and 74-year-old tax accountant Kenichi Yamaguchi. In the latest arrest, the three are suspected of submitting falsified financial statements in around November and December of last year to defraud Mizuho Bank of 600 million yen in loans. The statements were window-dressed to make it appear as if the company was profitable, when in fact it was actually in the red.
Last month, Hori and his associates were arrested for allegedly defrauding Mitsubishi UFJ Bank of 500 million yen in loans using the same method. They were indicted this month. It is believed that the three had prepared different financial statements for each financial institution by padding sales and reducing liabilities.
The investigation is ongoing, with police believing that three were trying to conceal the large amount of money they had borrowed from other banks in order to obtain other loans. According to the Tokyo police, the submission of such falsified financial statements is believed to have been repeated for about 20 years, and a manual showing the window-dressing procedure was seized. At the time of the bankruptcy filing, the company’s debt totaled about 25 billion yen to about 50 financial institutions.
According to the company’s bankruptcy petition, loans from the company to Hori personally amounted to approximately 3.3 billion yen. According to investigators, Hori is believed to have used the loaned money for working capital of more than 10 affiliated companies he managed, as well as for personal consumption, including the purchase of vacation homes in Japan and abroad and the leasing of luxury cars.
Horimasa Kogyo was founded in 1933. In 1950, it became an agent for NTN, a major bearing manufacturer. It has sold bearings to major manufacturers of automobiles, construction machinery and other products.
The company had been loaned money by megabanks and regional banks as a “preferred customer.” In recent years, there has been an increase in bankruptcies due to compliance violations, including the window-dressing of financial statements, according to Teikoku Databank. In 2023, the number of bankruptcies due to compliance irregularities exceeded 300 for the first time.
The Financial Services Agency is currently investigating whether financial institutions are lax in their loan-screening procedures..
