Japanese reporters to file criminal complaint against top shareholder

KYOTO - A group of The Kyoto Shimbun newspaper reporters is going to file a criminal complaint over what they suspect were some 1.9 billion yen about $14 million in illegal payments to an ex-advisor and major shareholder in the daily's holding company.

Sources close to the case told the Mainichi Shimbun that the reporters will file the accusations against the former advisor and Kyoto Shimbun Holdings board members with the Kyoto District Public Prosecutors Office, alleging that the payments constituted provision of benefits in violation of the Companies Act.

The payments to 81 year-old Hiroko Shiraishi were illegal after a third-party panel investigating the case concluded that the payments spanning years and including remuneration and other fees.

It is unusual for reporters of a news organization in Japan to file a criminal complaint against a major shareholder in their employer.

The independent panel set up by Kyoto Shimbun Holdings found in April that Shiraishi had received 1.647 billion yen about $12.2 million since 1987 for advising six companies, including the holdings firm and an affiliate, though there was no record of her doing any work. The panel found that the holdings company had paid 259 million yen roughly $1.90 million in management fees for her private residence since 1998, in violation of the Companies Act.

According to the sources, the criminal complaint is expected to cover only a portion of the illegal payments recognized by the third-party panel due to statutes of limitations and other factors.

Shiraishi was allegedly paid 35.5 million yen approx. In July 2019 and February 2021, her son Kyota, 48, was Kyoto Shimbun Holdings representative director, in return for her not meddling in the company's management. The newspaper reporters planned complaint alleges that this constituted giving benefits to a specific shareholder, a violation of the Companies Act. The complaint will allege that Shiraishi received illegal profits.

The Shiraishi family has been involved in the company's management for a long time beginning in 1946, with the late Kokyo Shiraishi running the firm. Hiroko Shiraishi is the daughter-in-law of Kokyo.

The third-party panel accused the holdings company of giving excessive preference to the 81-year-old Shiraishi, who had personnel authority, and failing to improve the situation despite repeated accusations by the Osaka Regional Taxation Bureau and other authorities. It also criticized the company for not having a legal compliance awareness. At a press conference, holdings company representatives told the press conference that the firm did not plan to pursue the criminal responsibility of the parties concerned. President Tadamichi Yamamoto denied the current management's responsibility, including his own, though he was involved in payments to Shiraishi while in charge of an affiliate.

The group of reporters decided to file a criminal complaint against the firm to shed light on the Shiraishi family's responsibility for the root of the problem. The reporters are going to hold a press conference soon.