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| AIJ president Kazuhiko Asakawa has been arrested on fraud charges related to the missing $1.4bn |
AIJ
Investment Advisors' president and three others have been arrested on fraud
charges relating to $1.4bn (£890m) of missing pension funds.
President
Kazuhiko Asakawa and executives at AIJ agent ITM Securities could face jail if
found guilty.
AIJ managed
money for more than 100 companies but was stripped of its registration in March
after failing to account for most of its clients' funds.
Japanese
prosecutors said $9m of the missing money was stolen from clients.
The scandal
is the latest to hit Japan, and there have been calls for changes in corporate
governance.
At the end
of last year, Japan was shocked by the news that camera maker Olympus had
hidden $1.7bn in losses for as long as 20 years.
Low returns
Japanese
pension fund managers are facing pressure to provide high rates of return,
despite the fact that the country's economy has experienced weak growth for two
decades.
Some funds
are required to provide a return as high as 5.5% at a time when returns on
safer investments such as lending to the government are at record lows.
Over the
past decade, the Japanese economy has grown at a nominal rate of between 0% and
1%, while the yield on the 10-year Japanese government bond is 0.8%. The Bank
of Japan's deposit rate has remained near 0% since 1995.
Related Article:
 |
| According to media reports, Japan’s Financial Services Agency has ordered AIJ Investment Advisors Co., which manages corporate pension funds, to halt operations after investigators found the company lost about $2.3 billion. Authorities have to track down the money lost by AIJ as the total amount seems to reach new heights to become a major case in Japan. (EPA Photo) |
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