Former Index President, CEO Charged for Fraudulent Practices

Wednesday, May 28th, 2014

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Index Corporation | oprainfall

Two former executives of Index Holdings, the former parent company of the Atlus brand, have been arrested in Tokyo. Former CEO Masami Ochiai and his wife, former President Yoshimi Ochiai, were charged for fraudulent practices that brought the company into trouble before being purchased by Sega Sammy late last year. The charges include window dressing their financial records and inflating profits and various related stats, all of which are violations of the Financial Instruments and Exchange Law.

Masami Ochiai - Former CEO of Index Corporation | oprainfall

Masami Ochiai, former CEO of Index Corporation.

This is part of a result from a series of events that began back in 2012. Index had posted a high sales figure of ¥183 billion (roughly $1.8 billion USD), which resulted in a profit of ¥4 billion ($39 million). These were the first profits the company had experienced in six quarters, putting it in surplus. Because of this, Japan’s Securities and Exchange Surveillance Commission (SESC) became suspicious of the holdings firm, eventually leading to the raid on Index’s corporate offices and the home of its Chairperson in June of 2013. It was later found that the company committed this act in an effort to stay on Japan’s JASDAQ stock market.

Yoshimi Ochiai, former President of Index Corporation.

Yoshimi Ochiai, former President of Index Corporation.

At that time, is was rumored that a second gaming group, along with the Incubator Bank of Japan and hedge fund manager Yamato Fumiaki, were all a part of the scheme. For the record, it was also rumored that Shingo Akigusa of Index was also in on it as well. As far as we know, only Mr. and Mrs. Ochiai have been arrested. Investigators will continue to look into the issues “under the suspicion that the series of fraudulent dealings were headed by Index’s management and that their window-dressing was performed systematically,” which could lead to even more arrests.

SOURCE: Nikkei via Gematsu

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