Consultant held for alleged tax evasion involving Canon projects+

TOKYO, Feb. 10 Kyodo - Prosecutors arrested the head of a consultancy Tuesday on suspicion of masterminding a series of maneuvers to evade a large amount of taxes on income that included slush funds funneled by Kajima Corp. over the construction of two
plants for Canon Inc., the prosecutors said.

Norihisa Oga, 65, president of Oita-based consultant firm Daiko, was arrested
on suspicion of violating the corporation tax law.
The prosecutors arrested five suspects Monday and seven others including Oga on
Tuesday over their involvement in the Daiko-led tax evasion scheme, bringing
the total number of arrests in the case to 12.
Investigations show that Oga, who doubles as president of a Daiko-affiliated
interior work firm called Light Black, conspired with other suspects to evade
the corporate taxes.
The other suspects arrested Monday and Tuesday include Hideo Namba, 61,
president of Osaka-based Naniwa Consultants International Co., and former Oita
prefectural assembly chief Sukekatsu Nagata, 80, who formerly was a board
member of Daiko.
The Daiko group interior firm allegedly evaded corporate taxes totaling 292
million yen by failing to declare 976 million yen in income earned during two
business years through May 31, 2006, according to the investigations.
The income included slush funds and commissions the company received from
Kajima, a construction contractor.
The Daiko group is suspected of failing to declare a total of around 3 billion
yen in income and of using much of the funds to purchase stocks, mainly shares
of Canon, a major precision machinery and electronics maker, investigative
sources said.
Industry sources said Kajima, one of Japan's largest construction contractors,
has won orders from Canon since 2003 to build a printer plant and a digital
camera plant in Oita, the capital of Oita Prefecture in Kyushu, and a research
facility in Kawasaki, Kanagawa Prefecture, outside Tokyo.
Kajima commissioned an Oita prefectural government-run land development firm to
develop the sites for the two plants in Oita, the sources said.
Oga worked as an intermediary to help Kajima win the orders from Canon and
received commissions including slush funds from Kajima, they said.
Oga's elder brother was a high school classmate of Canon Chairman Fujio
Mitarai, who is also chairman of Japan's most powerful business lobby, the
Japan Business Federation, known as Nippon Keidanren, the industry sources
said.
They also said Oga has maintained friendly ties with Mitarai.
Speaking to reporters Tuesday evening in Tokyo, Mitarai denied that he or Canon
have any connection to the tax evasion case.
The corporate tax law sets penalties of up to five years in prison, a 5 million
yen fine or both for those who evade taxes.