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The Yomiuri Shimbun The minimum sale price is indicated as ¥3.5 billion in a copy of a letter of intent to sell obtained by The Yomiuri Shimbun. The image has been partially modified.
The Yomiuri Shimbun
16:30 JST, January 23, 2022
Hiroshima-based social welfare corporation Sun Phoenix, which operates special nursing homes for the elderly in that prefecture and in Tokyo and Okayama, effectively sold its management rights, which is not allowed by the central government, and about ¥3 billion in its bank account was siphoned away, The Yomiuri Shimbun has learned.
As most of the outflowed funds are now deemed unrecoverable, the social welfare corporation is facing civil rehabilitation proceedings.
Social welfare corporations, which are required by the Social Welfare Law to be run in the public interest and nonprofit, are not allowed to buy, sell, or divert funds. It is extremely unusual for a multi-billion yen fund outflow to be discovered.
The Hiroshima prefectural government is conducting a special audit to investigate the situation, believing there are serious problems with Sun Phoenix’s management.
The social welfare corporation was established by a male doctor in Fukuyama, Hiroshima Prefecture, in 1994. It currently operates about 20 care homes and offices in the three prefectures.
According to several sources and a petition for the commencement of civil rehabilitation proceedings obtained by The Yomiuri Shimbun, the doctor, 72, and a male certified public accountant in Tokyo, 58, whose firm went bankrupt in October last year, signed an agreement in March 2016 on the transfer of management rights for ¥4.2 billion.
The payment was to be made in two parts, with the accountant contributing ¥2 billion to the doctor and providing him with ¥220 million each year for 10 years as compensation for medical cooperation.
In April that same year, the accountant took over as chairman of the board, replacing the doctor. From the end of the same month, ¥2 billion was sent from Sun Phoenix to a Hong Kong corporation headed by the doctor via a medical consulting company represented by the accountant.
From these findings, it is believed that most of the purchase price was not paid using the accountant’s own funds, but actually paid using Sun Phoenix’s funds. The annual payments of ¥220 million for five years until last year were also made under the guise of “compensation for medical cooperation.”
The accountant is also suspected of having diverted Sun Phoenix’s funds to his own affiliated corporations and used them as operating funds.
As a result of this outflow of funds, Sun Phoenix’s deposits, which were approximately ¥3 billion before the de facto sale, dropped to approximately ¥27 million in September last year.
In the same month, the Tokyo District Court decided to initiate civil rehabilitation proceedings. The total liabilities were about ¥6 billion.
