Tottori Gas’s former president was dismissed, bringing to light a series of fund movements surrounding allegations of misappropriation. His older sister became president, complicating the issues surrounding family ownership and management as well as the legal and tax considerations.
Tottori Gas announced the dismissal of its former president, citing the alleged personal use of company funds and unauthorized transfers. The dismissal took effect on 14 September, and the former president’s older sister became president. Investigations and a probe by a third-party committee are still awaited before the full picture can be established.
The misconduct uncovered included approximately ¥115 million misappropriated and transferred to a company newly established by the former president and his wife, approximately ¥30 million transferred to Enetopia Holdings, unauthorized changes to share registrations and fraudulent expense claims for business trips. It was also alleged that approximately ¥1.08 billion had been transferred multiple times to the former president’s personal account without board approval; repayment is reportedly confirmed.
The former president maintains that the funds were legitimate transactions made as advance payments, while the new president’s side argues that they may constitute misappropriation. The company intends to recover approximately ¥310 million that remains outstanding, but an investigation is believed to be essential to clarify the evidence. From a legal and tax perspective, the transactions could be treated as damages or loans to an officer, and failure to recover the funds could give rise to corresponding tax risks.
With regard to the impact on the local economy, local authorities are calling for the restoration of trust, while the limits of 100 years of family ownership and management and the need to rebuild governance have been highlighted. The company has indicated plans to review the controlling structure of its largest shareholders, including through broader share ownership and the introduction of an employee stock ownership plan. Attention is focused on the course of the police investigation and the development of civil and criminal proceedings.