Japan is no longer fraud-proof country

Senior lawyers were warned of rising Japanese fraud in business world. Dominic Roughton, senior partner at Herbert Smith in Tokyo, one of Asia's leading risk mitigation groups, said that most of the frauds that are emerging now have taken two to three years to develop. Property investments and companies with locally run satellite offices are being seen as the risky spots. 

John Kakuni, until recently general counsel at Shinsei Finance, said one of the reasons to such situation was Japan's image as a low-crime country. Foreign companies did not feel like they had to be as cautious of running business here, as they would elsewhere.

Moreover, Stuart Witchell, the senior vice-president of International Risk, warned investors of fraud as the leading non-operational cause of business failure in Asia. He also stated that Japan was the country where fraud occurred most often. He highlighted foreign companies doing business in Japan that rely on locals too much as especially vulnerable. Continuing his ideas, Jason Daniel, managing partner of Simmons & Simmons, in Tokyo, said: “Much depends on mutual trust - when dealing with someone that ‘deserves' to be trusted, this can mean a national hesitation in asking too many difficult questions.”