Tokyo Metropolitan Police arested on Tuesday Kazuhiko Asakawa, the president of AIJ Investment, the company which is being investigated for allegedly losing over $1.3 billion of its clients’ money.
The Japanese police said it held the 60-year-old president and three of his associates on suspicion of swindling Y7 billion from two pension funds, while the firm’s total losses raise to Y109 billion.
A police spokesman said that the president and his associates “conspired to defraud cash in the name of pension fund management”.
Kazuhiko Asakawa admitted at the end of March to covering-up losses amounting to more than $1.3 billion and apologized to clients and the financial sector.
The scandal was uncovered in February after it was learned that AIJ was being investigated by the Japanese authorities for losing billions of yen of its customers’ money. About 888,000 policy holders could be affected.
As a result of the AIJ case, the operations of all 263 investment management companies active in Japan will be monitored, the authorities previously said.