Daiwa House reveals funds scandal at Chinese affiliate

Daiwa House Industry Co. said Wednesday that a large amount of funds is likely to have been misappropriated at an affiliate in the Chinese city of Dalian.

The amount of the misappropriated money at Dalian Dahezhongsheng Estate Co., which engages in residential development and other business in China, is estimated to be at least ¥23.4 billion, Daiwa House said.

Two board directors and a treasurer sent from a Chinese company that also invests in Dalian Dahezhongsheng are believed to have been involved.

Procedures have been launched to file criminal charges with local investigative authorities against the three mainly on suspicion of embezzlement.

Daiwa House President Keiichi Yoshii told a press conference that the misappropriation is “extremely regrettable.”

“We deeply apologize for causing trouble,” he added.

Yoshii said he is not considering resigning. He expressed his determination to conduct a thorough investigation.

Another staff member at Dalian Dahezhongsheng found the treasurer trying to take out the company’s account books in early March.

As the treasurer failed to show up for work without any notice, Dalian Dahezhongsheng’s bank account was examined. The probe found a difference between the balance of the firm’s deposits in the account and the amount recorded in the books.

The gap totals 1,415 million yuan, or ¥23.4 billion, at present. Daiwa House expects to report a loss of ¥11.7 billion if it cannot recover the full amount.

Source: http://the-japan-news.com/news/article/0005604738

Source: http://the-japan-news.com/news/article/0005604738