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Friday, Sept. 8, 2006

Kimura admits window-dressing but denies fraud in building safety scandal

Staff writer

Former Kimura Construction Co. President Moriyoshi Kimura, a key figure in the building safety scandal, pleaded not guilty Thursday to fraud for allegedly selling a building he knew did not meet earthquake-resistance standards, but admitted to window-dressing.

News photo
Moriyoshi Kimura, former president of Kimura Construction Co., listens Thursday during the opening session of his trial at the Tokyo District Court. KYODO ILLUSTRATION

"I knew that the building had been certified safe," Kimura, 74, said during the opening day of his trial at the Tokyo District Court. "I never tried to deceive anyone to receive money."

Prosecutors said Kimura handed over a finished hotel in Nara Prefecture and accepted final payment despite knowing it didn't have the legally required amount of reinforcement to resist earthquakes.

The one-time president of the Kumamoto Prefecture-based constructor admitted falsifying the company's 2003 financial statements to get an operating license from the government.

"The charge (on the window-dressing) is true," Kimura told the court.

The indictment says that Kimura falsified the company's annual financial statements in June 2004 to show it had a net worth of 400 million yen, when it actually had liabilities that exceeded assets by 1.3 billion yen.

He allegedly falsified the figures to get a construction license from the land ministry. To get a license to build structures costing more than 45 million yen, firms must submit financial statements showing they are not operating at a loss.

Akira Shinozuka, former head of the Tokyo branch of Kimura Construction, faces the same charge. He pleaded not guilty at the start of his trial in August, saying Kimura acted alone.

Regarding the fraud charge, the indictment says the hotel operator paid Kimura 225 million yen on Nov. 7 and that Kimura allegedly knew about the hotel's deficiencies by the end of October, at the latest, when Shinozuka told him that architect Hidetsugu Aneha had reduced its earthquake resistance below the legal limit.

The hotel opened on Nov. 5 but was forced to shut down three weeks later when investigations revealed that it only had 44 percent of the structural reinforcement required by law.

The media have scrutinized Kimura from the beginning of the scandal because of his links to Aneha.

An investigation of his ties to the disgraced architect led to his arrest in April.

Kimura Construction reportedly earned about 23 billion yen over six years from 1999 by employing Aneha as its designer.

The proceeds from the buildings accounted for over a third of the 63 billion yen the company earned in the same period.

According to the land ministry, Kimura Construction built 56 of the 99 buildings that were based on blueprints falsified by Aneha.

However, based on Aneha's confessions, investigators believe the architect acted on his own in falsifying the data and have not charged Kimura Construction or any other company linked to him in the case.

Aneha, who is being tried in the Tokyo District Court, pleaded guilty Wednesday to falsifying construction data.

The charges against him include falsification of the Nara hotel's blueprints.

Kimura Construction filed for bankruptcy in December.

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The Japan Times

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