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Consultant held for alleged tax evasion involving Canon projects.

TOKYO, Feb. 10 Kyodo

Prosecutors arrested the head of a consultancy Tuesday on suspicion of masterminding a series of maneuverings to evade a large amount of taxes on income that included slush funds funneled by Kajima Corp. over the construction of two plants for Canon Inc., the prosecutors said.

Norihisa Oga, 65, president of Oita-based consultant firm Daiko, was arrested on suspicion of violating the corporation tax law.

Oga's arrest came a day after the prosecutors arrested five other suspects over their involvement in the Daiko-led tax evasion scam.

Investigations show that Oga, who doubles as president of a Daiko-affiliated interior work firm, called Light Black, conspired with the five other suspects in evading the corporate taxes.

Among the five who were arrested Monday was Hideo Namba, 61, president of Osaka-based Naniwa Consultants International Co. The others were businessmen Mitsuteru Ko, 43, Kenji Yamamoto, 58, Keiichi Shinzaki, 51, and Kozo Nakade, 43.

The Daiko group interior firm allegedly evaded corporate taxes totaling 292 million yen by failing to declare 976 million yen in income which it earned for two business years through May 31, 2006, according to the investigations.

The income included slush funds and commissions the company received from Kajima, a construction contractor.

The Daiko group is suspected of failing to declare some 3 billion yen in income in total and of using much of the funds to purchase stocks, mainly shares of Canon, a major precision machinery and electronics maker, investigative sources said.

Industry sources said Kajima, one of Japan's largest construction contractors, has won orders since 2003 from Canon to build a printer plant and a digital camera plant in Oita, the capital of Oita Prefecture in Kyushu, and a research facility in Kawasaki, Kanagawa Prefecture, outside Tokyo.

Kajima commissioned an Oita prefectural government-run land development firm to develop the sites for the two plants in Oita, the sources said.

Oga worked as an intermediary to help Kajima win those orders from Canon and received commissions including slush funds from Kajima, they said.

Oga's elder brother was a high school classmate of Canon Chairman Fujio Mitarai, who is also chairman of Japan's most powerful business lobby, the Japan Business Federation, known as Nippon Keidanren, the industry sources said.

They also said Oga himself has maintained friendly ties with Mitarai.

The corporate tax law sets penalties of up to five years in prison, a 5 million yen fine or both for those who evade taxes.
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Publication:Japan Weekly Monitor
Geographic Code:9JAPA
Date:Feb 23, 2009
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