Mysteries about the Land Fraud Incident
Bungei Shunju (Gekkan Bunshun)
May 2020 issue
Marunouchi Confidential
Sekisui House’s ordinary meeting of shareholders to be held on April 23, 2020 is drawing broader attention.
As a result of the land fraud incident that occurred three years ago, Mr. Isami Wada, former Chairman who pursued to dismiss Chairman Toshinori Abe (then President), was forced to resign. Because Mr. Wada is one of the slate directors in his shareholder proposal, people tend to think that this is just an internal factional battle. However, there were many suspicious aspects in the land fraud incident.
In the incident, Sekisui House went into contract with swindlers to purchase a piece of land in Gotanda, Tokyo, and was defrauded of 5.55 billion yen.
An investigation committee Sekisui House set up after the incident compiled an investigation report. In the shareholder derivative lawsuit that an individual shareholder filed, the shareholder requested that the investigation report be disclosed, which the court approved, but Sekisui House has continued to resist to disclose the full-text of the report.
Somebody, who appears to be involved and unhappy about the cover-up, disclosed the investigation report on the internet, and now everybody can see it. Then Mr. Wada made the shareholder proposal.
The investigation report has revealed some mysterious facts about this case. Sekisui House ignored the true landowner’s multiple content-certified mail warnings “the seller is fake.” Sekisui House’s argument was that they thought it was just an interference, but they executed the transaction without verifying the identity of the seller.
When making payments to the swindlers, Sekisui House used deposit checks that could easily accommodate money laundering, rather than their regular payment method of bank wires.
The swindlers used part of the land purchase money to buy Sekisui House’s condominium units that were not well selling.
Was Sekisui House really a victim of the fraud?
The mysterious land transaction or Mr. Wada’s revenge – which draws more attention from shareholders will determine the outcome of the shareholders’ meeting.