Olympus Takeover Scam Advisers Search Shines Light on Links to Hong Kong
Japanese bankers whose firm helped Olympus Corp. (7733) conceal losses by channeling inflated fees on a 2008 takeover through offshore funds are operating in Hong Kong, where they have run a web of shelf companies and rented luxury apartments for at least eight years.
Akio Nakagawa and Takuya Ichimura, both senior executives at boutique advisory firm Axes America LLC, are also founders of PromoTech Investment Ltd., a Hong Kong company that may have ties to another Olympus acquisition, ITX Corp. Both men gave the same unit at Pacific Place Apartments, a five-minute walk from Citigroup Inc. (C) and Goldman Sachs Group Inc. (GS) offices, as their residential address in filings.
Olympus’s $2.1 billion takeover of Gyrus Group Plc in 2008 and other acquisitions are the subject of criminal probes in Japan, the U.S. and U.K. after the camera maker admitted using deals to cover up investment losses dating back decades. The scandal highlights the role a global network of Japanese bankers played in shuffling non-performing assets offshore so companies could avoid booking their market value in a practice known as “tobashi,” or “to make fly away.”
Olympus officials in the past have denied there was any connection with Axes other than its role as adviser on the Gyrus deal. An independent panel was set up after the Tokyo-based company on Nov. 8 admitted to the cover-up, using $670 million in fees paid to a now-defunct Cayman Islands fund. It isn’t clear where the money has gone or how it was used to erase losses Olympus had kept hidden from its balance sheet.
Olympus spokesman Tsuyoshi Kitada said the company couldn’t comment pending the outcome of the probes.
No one answered the door last night at the 13th-floor unit in the 270-room Pacific Place Apartments that Nakagawa gave as his address in filings for PromoTech. As early as 2003, Nakagawa had rented a 12th-floor apartment in the same development, which shares the Conrad Hotel’s tower in Hong Kong’s Admiralty district.
A man who identified himself as the concierge yesterday said no one answered the phone after he was asked to connect a call to Nakagawa. The mailbox for the room Nakagawa claims as his last address was empty last night. This morning, a man identifying himself as the concierge confirmed both men are residents.
The registered address of PromoTech in Hong Kong is a unit in Central Plaza, in the Wan Chai district. The door to the office was locked on Nov. 10 when a Bloomberg News reporter called. A woman who declined to give her name refused to open the locked glass doors and threatened to call the building management. A return visit by two reporters yesterday yielded the same response.
‘A Long Time Ago’
Two years ago, PromoTech received a new investor: Shigenori Komuro, who took a 30 percent stake from Nakagawa.
Komuro is also the only listed director of Sky Ward Asia Ltd., company filings show. Sky Ward offers brokerage services to international clients, he said in an interview. Axes Japan Securities Co. acted as an agent for Sky Ward on its purchase of a stake in ITX Corp. in 2006, Japanese filings show.
On a Nov. 10 visit to Sky Ward, which has an office in the same tower as PromoTech, Komuro said his ties to Axes happened “a long time ago.”
When asked yesterday about his stake in Nakagawa’s PromoTech at his room in the Renaissance Harbour View Hotel, he denied any involvement in the Olympus deals and said he had no comment on his relationship with Nakagawa and Ichimura, who both hold Hong Kong identity cards, according to their filings. A man speaking in Japanese answered the hotel phone this morning, declined to identify himself and said Komuro wasn’t there.
Nakagawa and Ichimura’s ties to Hong Kong go back to at least 2000, when they founded Genesis Partners (Asia) Ltd. Cayman Islands-based Genesis Asset Management Inc. was the owner, filings show.
Genesis Asset Management was later renamed Zeus Capital Ltd., before being struck off in March 2010. Cayman Islands rules mean the identities of the beneficial owners of Zeus Capital aren’t publicly available. A fund called Genesis Venture Capital Series 1 Ltd. was a co-investor with Olympus in a number of acquisitions that are also now part of criminal probes.
The Cayman Islands companies registry also shows records for a company called PromoTech Ltd., set up in 2004 and shut on Dec. 31, 2007. PromoTech Investment was established in April the same year. The Cayman Islands firm had its registered office at Walkers Corporate Services Ltd., an arm of the law firm of the same name used by Axes in the Gyrus takeover.
Axam, the defunct Caymans fund, shared the same post office box address as Genesis Venture Capital and Zeus Capital, registry filings show.
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