National News

Mizutani Kensetsu in trouble over tax evasion

The former chairman of Mizutani Kensetsu Co. was arrested July 12 on suspicion of playing a key role in the engineering firm's evasion of ¥230 million in taxes.

Isao Mizutani allegedly worked with Shigeyuki Nakamura, a representing director of the company, and Obi Kensetsu K. K. President Fumio Obi, to evade corporate taxes.

They are believed to have hidden ¥760 million in Mizutani Kensetsu income by booking a bogus loss connected with a land deal in Iwaki, Fukushima Prefecture.

The company is also believed to have reported a bogus loss over a land deal in Kuwana, Mie Prefecture, in 2004, as well as booked losses on loans it never made.

Nakamura, 55, and Obi, 58, have already been arrested over the alleged tax evasion.

Meanwhile, prosecutors have searched the office of Rainbow Bridge, a Tokyo-based NGO engaged in humanitarian aid for North Korea, to investigate the organization's ties to Mizutani.

The NGO later said that Mizutani Kensetsu gave it heavy machinery worth ¥300 million to ¥400 million several years ago — an "up-front investment" for the firm to do business with North Korea after normalizing ties with Japan.

The company also provided ¥200 million in late 2004 to Rainbow Bridge.

Mizutani is believed to have played a key role in providing the money via an affiliated firm with the aim of starting a gravel delivery business in North Korea. (Kyodo)

Shukan ST: July 21, 2006

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