Sekisui House Land Fraud – current Chairman knew it was a fraud – former Chairman reveals
April 15, 2020
Mr. Isami Wada, former Chairman of Sekisui House
It was three years ago when a big fraud scandal was revealed that involved an old inn site in Nishi-Gotanda, Tokyo. Sekisui House entered into a land purchase contract with a fraudulent landlord group and lost 5.5 billion yen. A former top executive of Sekisui House criticizes Sekisui House executives by name.
After the fraud was unveiled, there was a coup at Sekisui House.
“While the management including Mr. Abe who approved of the land transaction should be held responsible, Mr. Abe was promoted to Chairman in February 2018, and Mr. Wada was forced to resign.” (a local news desk reporter at a national newspaper company)
Mr. Abe is Mr. Toshinori Abe, current Chairman of Sekisui House. Mr. Wada is Mr. Isami Wada, former Chairman and CEO. Sekisui House announced that the promotion and resignation were not related to the fraud incident, but at a board meeting of Sekisui House in January 2018, Mr. Wada presented a motion to dismiss Mr. Abe, and Mr. Abe presented a motion to dismiss Mr. Wada, and as a result Mr. Wada lost and left the company.
“I was too naïve and regret it….”
Mr. Wada said. He said that he had learned of the fraud in June 2017 after the fact.
Although he started to make a move to disclose the incident to the public, those involved with the transaction were all opposed to it. He recalls that the head of legal department even said that Mr. Wada should not do so since it will interfere with the investigation by the police.
“I asked a senior guy at the police, but he said it would not interfere with their investigation. I would presume that Mr. Abe and others did not want this to be taken up by the police and that they wanted to get away with it by just recording a special loss for the year.”
It took almost two months before Sekisui House made a release on the fraud. At Mr. Wada’s instruction an investigation committee was set up, and before a report by the committee was made available to the public, the coup happened. The current management has yet to disclose the full-text of the report.
Mr. Wada and his team made a shareholder proposal seeking to replace the current management at the ordinary meeting of shareholders of April 23, 2020.
“Mr. Abe was the first person to approve of the transaction, ahead of anybody else. It was therefore classified as a president project, and those working with him had to proceed with the transaction,” said Mr. Fumiyasu Suguro, current director of Sekisui House who works with Mr. Wada.
“If you take a close look at the transaction, you will wonder if Sekisui House was really a victim of the fraud.”
Sekisui House received multiple content-certified mail warnings from the true landowner saying “the party you are dealing with is fake”. Mr. Abe, despite the fact that he was aware of the warnings, failed to do his own due diligence – that is what Mr. Suguro said.
The land fraud that led to an internal factional battle – Weekly Shincho (April 16, 2020 issue) will report this in detail.