Kazuhiko Asakawa, President of AIJ Investment Advisors Co., Hideaki Nishimura, former president of AIJ’s sales arm, ITM Securities Co., and Shigeko Takahashi, AIJ senior official, have all admitted before the Tokyo District Court to having had a hand in the fraudulent transactions involving pension assets entrusted to the company by its customers. However, lawyers of Takahashi clarified that conspiracy among the three was doubtful.
According to the prosecution, Takahashi made false investment performance reports showing profitability of the asset management, which were submitted to pension fund clients of AIJ. This was supposedly under the instructions of Asakawa. In 2004, Nishimura discovered the same but Asakawa ensured that it would not be made public. In 2005, they began to use the money from new client pension funds to refund the amounts paid by those who have cancelled their existing asset management contracts with AIJ.
While the company continued to lose money, all three received hefty sums as salaries for seven years beginning 2005: with Asakawa receiving a total of 700 million yen (approx. $8.5 million), and Takahashi and Nishimura receiving a total of 200 million yen ($2.43 million). By March 2011, AIJ’s investment losses summed up to 109 billion yen ($1.32 billion).
The indictment stated that these AIJ officials defrauded 17 pension funds in Tokyo and six other prefectures between April 2009 and January 2012 to the total amount of 24.8 billion yen ($301 million) by illegally padding the performance reports sent to clients.
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