Kyoto Daily Reporters Sue Shareholder For Illegal Payments

A group of The Kyoto Shimbun newspaper reporters is preparing to submit a criminal complaint over what they believe to be 1.9 billion yen (about $14 million) in illicit payments to an ex-adviser and significant shareholder in the daily's holding business, Norikazu Chiba reported for the Mainichi Shimbun.

Photo Insert: Kyoto Shimbun Newspaper Company Headquarters in Nakagyo-ku, Kyoto, Kyoto Prefecture, Japan

According to sources close to the issue, the reporters will file complaints with the Kyoto District Public Prosecutors Office against the former advisor and Kyoto Shimbun Holdings board members, arguing that the payments constituted giving of benefits in violation of the Companies Act.

The move comes after a third-party panel investigating the issue found that the payments to 81-year-old Hiroko Shiraishi, which spanned years and included salary and other expenses, were illegal. It is unusual for Japanese journalists to pursue a criminal case against a major stakeholder in their employer.

In April, an independent panel appointed by Kyoto Shimbun Holdings determined that Shiraishi had received a total of 1.647 billion yen (about $12.2 million) since 1987 for advising six companies, including the holdings firm and an affiliate, despite the fact that there was no record of her doing any work.

Furthermore, the panel determined that the holding company had paid 259 million yen (about $1.90 million) in management fees for her private property since 1998, in violation of the Companies Act.

Due to statutes of limitations and other variables, the criminal case is expected to encompass only a portion of the unlawful payments acknowledged by the third-party panel, according to sources.

Shiraishi was allegedly given 35.5 million yen (about $262,000) per year by her son Kyota, 48, while he was Kyoto Shimbun Holdings' representative director from July 2019 to February 2021, in exchange for not interfering with the company's operation.

The planned complaint by the newspaper reporters contends that this constituted offering benefits to a specific shareholder, a breach of the Companies Act. Shiraishi will also be accused of receiving unlawful earnings, according to the complaint.

The Shiraishi family has long been active in company management, with the late Kokyo Shiraishi leading the company for an extended period beginning in 1946. Kokyo's daughter-in-law is Hiroko Shiraishi.

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