Yakuza and businesses
Advanced Technology and Systems Co. (ADTX), a Tokyo-based computer peripherals manufacturer, was listed on the Hercules emerging market on the Osaka Securities Exchange until May 2006, when the company went under.
An ADTX vice president who is a former leader of a gang affiliated with the Yamaguchi-gumi mob group has been arrested on suspicion of illegally disposing of the company's assets.
The man became vice president when the company was still listed on the exchange. How could a former mob boss become an executive of a respectable public company?
The Metropolitan Police Department said that when ADTX ran into financial trouble in 2006, the president of a publishing company who had been close to ADTX's founder took over. The ex-gangster was an acquaintance of this president, so he managed to worm himself into the heart of the business.
The former mob leader has acquired another software firm as well. He was arrested for allegedly having ADTX buy useless software costing 63 million yen from that company.
Businesses occasionally become victims of crime. But the recent case is particularly disturbing because the suspect bought shares of Nagasaki-based Yubitoma Inc., the operator of an online alumni site, and became its president.
Yubitoma connects 3.6 million member alumni throughout the country over the Internet and manages a huge amount of personal information.
Police suspect the former mob leader planned to sell the firm to make hundreds of millions of yen in profit, but we wonder if he wanted to exploit the personal data. Many Yubitoma members might have felt anxious when they discovered the company was controlled by a former leader of a gang.
The man apparently never made public his former mob ties. However, ADTX board members told police they had suspicions about his past from his language and behavior, and that they were afraid of him.
If the suspect had completely disassociated himself from yakuza organizations, society should support his rehabilitation. However, if he is still connected to such groups behind the scenes, or hints at his past to intimidate people, he should be shunned.
Police must quickly investigate whether the man had really severed relations with gangs and if he donated part of his business benefits to yakuza groups.
According to the National Police Agency, the number of gang members is declining. Yet the number of those who have deep connections with such criminal organizations has continued to rise, topping the number of full-fledged members last year. This trend can be explained as an attempt to mask the actual conditions and to evade police.
Furthermore, gang tactics have become increasingly sophisticated, such as infiltrating financing businesses and public projects. If gang members begin making demands of business managers and seek deals, executives, board directors, auditors and corporate lawyers must use all possible means to protect their companies.
The quick and easy response is to go to the police. The investigation of the recent case began with a tip provided by a source involved in the matter.
Huge amounts of money trade hands in corporate acquisitions and sales. Such funds should not flow to underground organizations. The National Police Agency and stock exchanges established a council at the end of 2006 with the aim of eliminating the involvement of mobsters in securities markets. They should fully exchange information to halt gang penetration of corporate society.
