top of page






Former Chairman fighting back in a conflict at Sekisui House, involving MUFG Bank on possible money laundering

Interview - Isami Wada, former Chairman & CEO, Sekisui House 【1st Part】

Diamond editor team

February 21, 2020

In mid-February 2020, Sekisui House's former chairman and CEO Mr. Isami Wada of Sekisui House made a shareholder proposal to renew the company’s management team.  In 2017 the company suffered a loss of approx. 5.5 billion yen in a fraudulent landlord case.  Mr. Wada and Toshinori Abe (then president) confronted over the responsibility of the incident and tried to dismiss each other, and Mr. Wada was forced to resign by Abe and its allies.  Two years have passed since the "coup", now Mr. Wada calls for an election of all the 11 slate directors, including himself, at the annual general meeting of shareholders in April.  In addition to Mr. Wada, among the slate directors are Mr. Fumiyasu Suguro, current Director and Senior Managing Officer, Mr. Christopher Douglas Brady who is familiar with anti-money laundering, and Ms. Pamela Fennell Jacobs, an ESG expert.  They were interviewed by Diamond editor team.  Through this interview, Diamond has come to learn that they had sent a letter to MUFG Bank on the incident, in addition to having sent Sekisui House their shareholder proposal. (Interviewers: Diamond editor team – Masami Usui, Takeshi Shigeishi)

Coup after the incident – similar to Olympus

――If all the directors are replaced by the slate directors as proposed in the shareholder proposal, you are saying that you will reexamine the land fraud incident Toshinori Abe (then president) was involved with.  Do you mean that you will file a criminal complaint against Mr. Abe?

Mr. Wada The company is only suing the fraudulent landlords.  Sekisui House was a victim in the incident, so you may think what's wrong with the company?  But this case needs to be examined further.  So we will launch a third party committee once again.

 The police can't move, unless you report damage (in addition to suing the fraudulent landlord group).  You can't tell, without examining the case further, if it is going to be a criminal case or not.





















(Editor's note: The shareholder proposal has determined that Chairman Toshinori Abe, Vice Chairman Shiro Inagaki, President Yoshihiro Nakai, Executive Vice President Takashi Uchida are not suitable due to the following reasons: “Improper transaction'' in the land fraud case where a land purchase contract with a fake owner was signed and approx. 5.5 billion yen was deceived.  “Cover-up of material information'' where the management team refused to disclose the investigation report produced after the incident. “Governance failure” which is the fact that the current management continues to control the company ignoring the decision that Mr. Abe should resign due to the responsibility of the improper transaction.

The above four representative directors have been charged in a shareholder representation lawsuit with violating their duty of diligence.)

――Sekisui House made a series of mistakes, none of which seemed like simple ones?

Mr. Wada Have you read the “investigation report” (produced in 2018 by the Investigation Committee comprised of outside directors)?

――Yes, I have.  It was revealed that payment were made to the fraudulent group with deposit checks, that multiple content-certified mails giving warnings were received from the real owner before the transaction closing, and all the warnings were ignored.  The lost money may have gone to the underground society.  The report pointed out Abe's heavy responsibility for the incident.

Mr. Wada Whoever read it should think it is very weird?  If you know the details, you know he (Mr. Abe) is not a victim?  I'm not saying he is a criminal, but it's close.  That's why I call it "improper transaction."

――If you receive a warning by content-certified mail, the legal department should at least stop the transaction and try to verify the identity of the seller.

Mr. Wada Normally.  Totally unbelievable.

 Probably because it was designated as a President project.  10 red traffic lights did not help them stop.

――At the time, everyone seemed to know that the Gotanda, Tokyo land deal was a fraud.

Mr. Wada  The transaction first went to Daiwa House who declined, and then Sekisui House learned of it and grasped at it.

――Mr. Abe was in charge of the domestic business and you (Mr. Wada) were in charge of the overseas business.  Despite that, you could not exert enough control as CEO over the domestic business?

Mr. Wada  They did it without making me aware.  Governance was not necessarily properly working.

――So you are regretting it to some extent?

Mr. Wada There was an internal rule that anything less than 10 billion yen did not have to go through the process of approval by the board of directors, so that is how it was processed without making me aware.

――Once the incident was unveiled, did you accuse Mr. Abe?

Mr. Wada Yes, that may be why I was let go.  I set up a committee to investigate the incident and told them to publish the findings.

 They needed to cover up since they did not want to be penalized.

Mr. Brady The current management team has resisted the court’s order to file the investigation report (in a shareholder representation lawsuit).


















This is very similar to what once happened at Olympus (huge loss cover-up), which has been drawing attention in the U.S.  In the Olympus case the whistleblower was eventually kicked out.  This happens if the board is not independent.


Signs of money laundering in the land fraud incident
A questionnaire sent to MUFG Bank

――People in Japan seem to understand that the land fraud incident is already over since the chief criminal of the fraudulent landlord group was arrested and the loss from the fraud was recorded as an extraordinary loss at Sekisui House.  Is it not the case in the U.S.?

Ms. Jacobs Corporate governance is now the world's most important issue.  Many companies are expected to work and perform under reasonable standards.  They should not be involved in terrorism or money laundering, and if you get involved then it is a very large red flag in the U.S.




























――At the press conference on February 17, 2020, Mr. Brady, who is familiar with anti-money laundering, said that there are signs of typical money laundering and that he was working with US intelligence agencies in this regard.

(Editor's note: High-value real estate transactions are generally settled by bank wire, but in this case deposit checks were used.  The flow of money is less traceable if you use deposit checks, so it is often used for money laundering.)

Mr. Brady I was not inside the company back then, so I could not help.  If I were there it would have been easy.

――Mr. Brady points out an issue with MUFG Bank, which cashed the deposit checks.  Are you already talking to the bank on this?

Mr. Brady Counsels sent a letter of questionnaire to the bank.


Mr. Brady On January 9, 2020.

――Got any response?

Mr. Brady Not yet.  The bank is a good bank, and Sekisui House has had a good relationship with the bank.  Once we win we would like to maintain the good relationship with the bank.  I wrote in the letter that by closely working together we want to clarify what happened.

――Is it best to work with the bank to investigate?

Mr. Brady Yes, of course.  We need to do so.

――Looking at the Mitsubishi UFJ Financial Group as a whole, the % shareholding of Sekisui House increased in 2019, making it one of major shareholders owning over 8% (as of August 2019).  Maybe the bank is not seeing the incident as an issue?

Mr. Brady I do not have an answer to it, but Sekisui House is a good company.

>> Continues to 2nd Part “Sekisui House Proxy Fight, Investors make a move in a governance failure case at an ESG company.


Isami Wada/Born in Wakayama Prefecture in 1941.  After graduating from Kwansei Gakuin University, joined Sekisui House.  He excelled in home sales and has been a well-known business leader for 20 years since he became President in 1998.  Since becoming Chairman and CEO in 2008, he has led overseas business.  In conflict with the then President Toshinori Abe in connection with the land fraud case, he was dismissed in 2018. Photo by Toshiaki Usami

Christopher Douglas Brady / Born in 1954.  Chairman and CEO of Chart Group in the U.S..  He has experience and knowledge in national security, risk management, and anti-money laundering.  He served as President George Bush's New Jersey campaign manager, and is close to the U.S. government.  Mr. Wada’s acquaintance Photo by T.U.


Pamela Fennell Jacobs / Born in 1960.  Chief Sustainability Officer of Spouting Rock Asset Management in the U.S.  She is an ESG (Environmental, Social and Governance) expert and engages in activities that emphasize ESG goals for public companies.  Also provides consulting services, lectures, etc. Photo by T.U.

bottom of page