Former chairman of Daio Paper under investigation for gambling away billions


Prosecutors are to launch an investigation into the former chairman of a paper manufacturing company who allegedly borrowed 10.6 billion yen from one of the firm's subsidiaries.

Mototaka Ikawa, 47, the former chairman of Daio Paper Corp, is believed to have gambled away billions of yen of the firm's money at casinos in Macau and Las Vegas.

According to TV Asahi, investigators at the Tokyo District Public Prosecutors Office will question Ikawa over a suspected breach of trust.

Daio, the country's third-largest paper mill was founded by Ikawa's grandfather.

A special committee set up by Daio to investigate the matter found that Ikawa borrowed a total of 10.68 billion yen. The committee said the money was transferred to bank accounts in Ikawa's name between May 2010 and September 2011.

Although Ikawa returned some of the money, as of the end of October, 5.93 billion yen had still not been recovered.

Daio Paper has filed a criminal complaint with prosecutors based on the report. The committee found that some of the loans were made without collateral and without the approval of the board of directors, as is required by law.

NHK reported that Ikawa would call the heads of the subsidiary companies and tell them how much money to deposit in his personal bank account or the account of a Japanese firm that operates casinos in Las Vegas and Macao.

No collateral was asked for and the board of directors were never informed, the panel said.

Employees were quoted as saying that no one dared questioned the orders of any of the Ikawa family.

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Japanese companies notoriously follow the demands of the President or CEO and fear asking questions about anything that might be strange or out of line. It's the prerogative of the President to do whatever he pleases, a modern day daimyo, and damn anyone that isn't subservient or doesn't blindly give their fealty to the company and boss.

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@Yubaru, only if the president or the CEO are big share holder, meaning if they are part of the founder(s). Hired CEOs and presidents don't have that kind of authority.

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This is hardly a rare event for Japan Inc, look at hato-chan & his silly allowances from his money who takes it outta Bridgestone, pretty common occurance in these neck of the woods haha

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Looks like he should have just stuck to playing Pachinko.

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He should have went to Vegas. At least they would have comped the trip over there and paid provided him with some type of executive package, and possibly a decent sewing package from the concierge.

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from his mommy not his money haha, well same thing I guess!

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I think he did go to vegas

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He should be commended for spending real money in Vegas.

As director of a paper company, who knows what kind of counterfiet paper money he could have made.

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Although Ikawa returned some of the money, as of the end of October, 5.93 billion yen had still not been recovered.

I am wondering how the CPA working for Daio have justified the loss of 4.93 billion yen on the financial statement.

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Japan is a giant black hole as far as accounting goes, you never ever believe whats written in annual statements etc, the truth is simply never there in most cases

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GW, that's too bad. We (I am in US) do not fully trust any official data coming out of China as they are somewhat distorted. Now Japan is lowering its level to China as far as a fidiciuary duty goes. Sounds like the financial statement of Japanese corporation means NOTHING. It is just a meaningless data for underwriting. Hope Japan is rolling up the sleeves and beginning to prosecute bad guys. I would like to hear what Keidanren has to say on these incidents.

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globalwatcher, yes clearly only Japanese and Chinese company data is distorted. An incident like this could never happen in Europe or the U.S., could it? And obviously all the search results from around the world for "boss defrauds company" are not the same thing.

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we will see more and more of this crap come to light. wouldn`t it be grand if japan could really start fresh?

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The company is called Daio, but the former chairman should be called Daimao (the demon king).

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Unfortunately this happens worldwide. Another greedy and wealthy CEO that risked his family, reputation, wealth, power, everything. And for what? You've got to wonder, what motivates rich high powered CEO's to unnecessarily risk it all against logic and ethical principles. Exceptional success followed by devastating disaster comes from gambling. He probably risked away more wealth than he stood to gain from gambling or perhaps all that power and money made him feel invincible, untouchable, arrogant and above the law. And maybe he got caught because at some level, he knew what he was doing was wrong and wanted to be punished for it. You can never fell right doing wrong. He must have functioned exceptionally well until his issues got caught up after he retired and now a dysfunctional crook with no respect as a senior citizen.

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What an idiot! The guy's father worked his butt off to make so much $$$ so that his son?? Grandson?? Could do this kind of stupid thing??

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Maybe he used to work for Olympus and learned his ways there.

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globalwatcher, yes clearly only Japanese and Chinese company data is distorted. An incident like this could never happen in Europe or the U.S., could it?

billyshears -- fair enough point. A comparison between this situation and the TYCO scandal are obvious. But, that was almost ten years ago. And, what remains to be seen whether this and the Olympus scandal will finally make Japan get serious about corporate governance or just muddle on. Sarbanes - Oxley put corporate CEO's, directors, and auditors responsible criminally for any shenanigans. Will Japan do likewise? Doubt it.

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