Index’s Former CEO And President Both Arrested For Fraud

By Sato . May 28, 2014 . 3:30am

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Last year, Atlus’ former parent company, Index Holdings, ran into some trouble with the law after being suspected of improper accounting. This led to Index filing for bankruptcy and the eventual sale to Sega Sammy. Now, Nikkei reports that the former Index CEO and president have both been arrested.

 

The Nikkei article says that the former Index CEO Masami Ochiai and his wife, former president, Yoshimi Ochiai, have both been arrested earlier today in Japan on charges of falsifying of financial records and inflating profits during their time with Index.

 

According to the Nikkei source, the method used was the round-tripping barter method, that gave the appearance of Index’s dealings of software and IT systems to keep records of the transaction taking place. This eventually led to the suspicion of the company’s inflation of sales and profits from their business quarter which ended on August 2012.

 

Index’s stock report indicates that during this period, their sales were up at around 183 billion yen (about $1.8 billion) with the final profits at around 4 billion yen (about $39 million). These figures were believed to be the company’s first surplus since the previous six quarters prior to that, but it’s been reported as a result of the inflated numbers from the round-tripping method.

 

The insolvency came to light when Index filed for bankruptcy, which followed by an internal investigation on the matter. According to the report, the round-tripping was likely done as an attempt to prevent being delisted from the Japanese stock market (JASDAQ).

 

Masami Ochiai continues pleading his innocence by saying he “did not do anything illegal” when further asked about Nikkei’s coverage on the matter, which he also stated during his recent hearing.


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