It has been ten months since the 500 .com bribery case broke into public view, but the net of justice has yet to fall upon and to wring confessions out of those who are widely believed to be the most guilty.
In the latest twist, 500 .com, the Shenzhen-based sports lottery firm believed to have bribed former Senior Vice-Minister of the Cabinet Office Tsukasa Akimoto and other Japanese politicians, reported to Nasdaq that the special investigation committee established back in January “did not find a sufficient basis to establish a violation of the US Foreign Corrupt Practices Act of 1977 in connection with the company’s prior activities in Japan.”
The investigation was conducted in a supposedly independent fashion with King & Wood Mallesons, a multinational law firm headquartered in Hong Kong, as its legal advisors.
In a very opaque passage, the company statement continued, “The special investigation committee has also reviewed the company’s compliance policies, procedures, and internal controls in light of the suggestions from King & Wood Mallesons. The company has updated such policies, procedures, and internal controls based on recommendations from the special investigation committee, and will continue to enhance its internal controls as appropriate.”
Since the scandal broke last December, 500 .com has been extremely tight-lipped. Former Director and CEO Zhengming Pan, who had once seemed to be the leading force within the company, was pushed out by early February, and the only real initiative that the firm announced was the special investigation committee, which took ten months to report that no laws were broken.
And, in another mysterious development at the end of last month, 500 .com announced that its auditor, Friedman LLP, resigned in connection with the Japan bribery case.
That statement said, “Friedman has elected to resign as the auditors of the company because of the disagreement with the management of the company on the effectiveness of the company’s internal control over financial reporting in light of certain alleged unlawful payments by three former consultants while they were engaged by the company in connection with the potential development of an integrated casino resort project in Japan.”
It continued, “Friedman determined that the payments may have reflected material weakness in relation to internal controls of the company. Friedman further advised us on September 23, 2020, that because some of the payments had occurred in 2017 and 2018, the allegedly unlawful purpose of which was not known to Friedman at the date of the audit reports relating to the company’s consolidated financial statements for the years ended December 31, 2017 and 2018. Accordingly, the integrated audit reports issued by Friedman on the company’s consolidated financial statements for fiscal years ended December 31, 2017 and 2018 should no longer be relied upon. The company’s Audit Committee has discussed the issue with Friedman, and it does not agree with Friedman’s conclusion. The Audit Committee is not aware of any information suggesting that the relevant audit reports are inaccurate or misleading.”
As a result of Friedman’s resignation, 500 Dot Com’s board simply appointed another firm to become its auditor.
Effectively, 500 .com has declared itself innocent of any substantial wrongdoing to both the public and to the US stock market, and they have offered no opinion about the fact that a number of Japanese citizens, including some of its former consultants, have all admitted guilt to the prosecutors and the courts on charges of offering bribes on 500 .com’s behalf.
Less than a month ago, Kimihito Kamori, the former chairman of Kamori Kanko, admitted to the court that he had participated in efforts to bribe lawmaker Tsukasa Akimoto, and Kamori was accordingly convicted and handed a suspended sentence. In Kamori’s statement to the court, he said, “I enthusiastically made an appeal to attract an IR to Rusutsu village, Hokkaido, and was actively involved in the crime. It was a vicious crime that significantly damaged confidence in IR policy.”
500 Dot Com and the key lawmaker Tsukasa Akimoto have yet to concede even one point and maintain that they have done nothing wrong.
Time will tell if they will ever take responsibility, or if they will be held responsible by those who are supposed to police the system. (AGB Nippon)