H.I.S. units fraudulently received ¥680 mil. in aid

Jiji Press

16:23 JST, December 25, 2021

TOKYO (Jiji Press) — Subsidiaries of travel agency H.I.S. Co. have fraudulently received up to around ¥680 million in financial aid related to the Japanese government’s Go To Travel domestic tourism promotion campaign, an internal probe showed Friday.

At a press conference, H.I.S. Chairman and CEO Hideo Sawada apologized for the investigation results, saying that the fraudulently received aid will be returned after discussions with the Japan Tourism Agency.

Sawada suggested that the two subsidiaries will no longer apply for aid under the Go To Travel campaign, but said that the parent company will seek to continue utilizing the initiative as it did not engage in fraudulent activity.

A third-party investigative committee appointed by H.I.S. found that units Japan Holiday Travel Co., based in the western city of Osaka, and Miki Tourist Co., based in Tokyo, fraudulently received subsidies and coupons related to the government campaign.

Hotel operator JHAT Co., headed by Akira Hirabayashi, who served as president of H.I.S. until 2016, was found to be involved in the fraud cases of both subsidiaries.

Junichi Aratake, chairman of the investigative committee, told a press conference that he feels “there may have been influence” from Hirabayashi over the two subsidiaries. He also noted that such fraudulent cases were not confirmed at any other company in the H.I.S. group.

According to the committee, Japan Holiday Travel received subsidies for hotel rooms booked but unused in autumn last year and later under travel plans sold to four corporations. The plans, which included rooms for employee training sessions, were sold following a proposal from JHAT.

The panel found that the subsidiary needs to return up to around ¥642.49 million to the government. It could not confirm, however, whether Japan Holiday Travel colluded with JHA, and the fraud was likely led by the hotel operator.

Miki Tourist signed a contract to book 20 rooms at JHAT-run hotels for 60 nights so that 80 people including employees of the company could use them for remote working. The company applied for aid from the Go To Travel campaign, although employees used only 114 rooms out of the 4,800 booked.

Many Miki Tourist employees were unaware of the contract, and the committee believes that the subsidiary and JHAT planned to split the 40.8-million-yen subsidies received.

Sawada said that H.I.S. will replace Miki Tourist’s management, including its president, in order to rebuild the unit.