Kappa Sushi president arrested on suspicion of stealing corporate secrets

Kappa Sushi president arrested on suspicion of stealing corporate secrets

Koki Tanabe, the president of Kappa Create Co., operator of the Kappa Sushi revolving sushi chain Asahi Shimbun file photo The president of a revolving sushi chain was arrested on September 30 over allegations he stole corporate secrets from his former employer, now a rival in the business.

The Metropolitan Police Department of Tokyo arrested Koki Tanabe, 46, president of Kappa Create Co., who operates the Kappa Sushi chain, on suspicion of violating the Unfair Competition Prevention Law.

Tanabe worked for Zensho Holdings Co., which operates the Hama-sushi chain of sushi restaurants before becoming an adviser to Kappa Create in November 2020.

Tanabe was also an executive at Hama-sushi for three years from 2014.

According to the investigative sources, Tanabe is suspected of copying trade secrets of Hama-sushi, such as the price at which the company bought seafood, to a memory drive around October 2020, when he still worked for Zensho Holdings.

In June 2021, the MPD searched the offices of Kappa Create over suspicions that Tanabe obtained monthly sales figures from a former colleague at Hama-sushi after he started working at Kappa Create.

The police were continuing their investigation into that suspicion, according to the sources.

In June of this year, Tanabe was voted as company president at Kappa Create's shareholders meeting.

Sources said he would decide whether to resign based on the outcome of the police investigation, and he apologised to those who were gathered at the meeting.

In April, Tanabe told The Asahi Shimbun that he did not obtain data from Hama-sushi, but he stressed that knowing the sales figure for a rival firm would not help him improve Kappa Create's fortunes.

He didn't say whether he knew that his actions were possibly illegal.

Kappa Create issued a statement on Sept. 30, apologizing for the trouble caused, saying it was still trying to confirm all the facts.

The revolving sushi chain is controlled by four major companies, Akindo Sushiro Co.Sushiro Co. Kura Sushi Inc., Hama-sushi and Kappa Create.

The four companies accounted for 80 percent of the market in 2021, up from 68 percent in 2014, according to the research company NPD Japan.

Akindo Sushiro is the largest sushi chain in the world. Food and Life Companies Ltd., which operates the Sushiro chain, had sales of 240.8 billion yen $1.7 billion in the fiscal year ending September 2021.

Kappa Sushi is fourth in the fourth place, with sales of 67.2 billion yen, or one-fourth that of Sushiro, in the fiscal year ending March 2022.

Tanabe was likely recruited by Kappa Create to improve its corporate performance, since its sales are about half that of Hama-sushi.