Crime Dec. 11, 2011 - 06:35AM JST ( 13 )

TOKYO —

Former Daio Paper Corp Chairman Mototaka Ikawa, who was arrested in November for allegedly siphoning off billions of yen from the company’s subsidiaries to pay for his gambling addiction, is to be arrested again following the emergence of new evidence.

Investigators from the Tokyo District Public Prosecutors Office’s special investigation unit arrested Ikawa in November on suspicion of aggravated breach of trust, a violation of the Japanese Companies Law. At the time Ikawa, the grandson of Isekichi Ikawa, the founder of the company, admitted gambling with about 10.6 billion yen he borrowed from Daio subsidiaries.

He subsequently issued a written apology saying, “It was all due to my lack of discretion. I deeply regret what I did.”

However, TV Asahi reported Saturday that investigators now say that they have uncovered evidence of further unsecured loans from other company subsidiaries that were not previously disclosed. The new debts bring the total amount to 15 billion yen.

The company’s stock was placed under supervision by the Tokyo Stock Exchange on Nov 10, when it became clear the company might not be able to submit its earnings report for the period ending in September. Daio, however, said this week that it can submit the midyear earnings report before the final deadline of Dec 14. Failure to submit the report will result in delisting.

Daio paper has 35 consolidated subsidiaries across the country and two overseas subsidiaries. Ikawa joined the company in 1987 after studying law at the University of Tokyo. He assumed the president’s post in 2007 at the age of 42 and became chairman in June.

Japan Today