Former Index Chairman, President Found Guilty of Improper Accounting
posted on by Rafael Antonio Pineda
The Tokyo District Court found former Index Corporation chairman Masami Ochiai and his wife and former Index Corporation president Yoshimi Ochiai guilty of violating the Financial Instruments and Exchange Law through improper accounting via fictitious transactions on Tuesday. The court sentenced both to three years in prison, although the sentence is suspended for four years so they will not serve time if they remain on good behavior.
Index Corporation is proceeding with its civil rehabilitation bankruptcy procedures.
Index came under suspicion for improper accounting in 2013. Index reported that it earned a total of 18.3 billion yen (about US$190 million) in 2012 from console/portable system games and smartphone games. However, the company exaggerated revenues using round-trip transactions. The company filed for civil rehabilitation procedures (a relatively new form of bankruptcy procedures in Japan) later that year, and Masami and Yoshimi Ochiai resigned their positions, and were arrested and charged in 2014. Index listed about 24.5 billion yen (about US$250 million at the time) in debts.
As part of the bankruptcy proceedings, Index selected Sega as its sponsor from a group of about 20 bidders to transfer its business operations and maintain its value. Sega Sammy Holdings and Index Corporation confirmed Sega Sammy's takeover in September 2013. After the acquisition, Sega split Index into two different subsidiaries: Index and Atlus.
Index was established in 1995, and was first listed on the JASDAQ securities exchange in 2004. It expanded into the game industry by acquiring Atlus as a subsidiary ten years ago.