Japanese billionaire Genshiro Kawamoto denies that he cheated on his taxes, an allegation that led to his arrest Tuesday in Tokyo.
In an interview with reporters before he appeared before the Tokyo District Public Prosecutors Office, Kawamoto said, “I haven’t evaded taxes and I don’t know anything about it ( the charges),” the Yomiuri Shimbun newspaper said in its English-language edition. “Tax inspections should have been completed last year,” Kawamoto said.
But prosecutors say Kawamoto, 81, is suspected of evading about $9 million in corporate taxes from his Marugen group companies, which operate more than 50 buildings in places such as Ginza in Tokyo and the Hakata and Kokura districts of Fukuoka Prefecture, according to Japanese media reports. The buildings house upscale clubs and bars.
The Japanese television network NTV reported that the money from the alleged tax evasion was used to buy art for the museum Kawamoto is building in Hawaii.
Kyodo News said Kawamoto was arrested for hiding over $31 million in revenue over three years ending in December 2011, avoiding $9.2 million in corporate taxes.
The Yomiuri Shimbun, quoting the prosecutors office and other sources, said Kawamoto is believed to have played a leading role in the Marugen group’s tax evasion by not reporting rent for some tenants of the group’s core company, Tokyo Shoji, and falsely listing losses under the guise of building sales. Tokyo Shoji, which has been liquidated, did not pay corporate tax during that period as it reported losses.
An accountant for the group reportedly told prosecutors that Kawamoto gave instructions to juggle the accounts, the Yomiuri Shimbun reported.
Kawamoto was occasionally informed of the group’s sales, and told the accountant to juggle the accounts to keep the company “slightly in the red,” the newspaper reported. Kawamoto checked tax documents before they were submitted, the sources said.
Kawamoto told the Yomiuri Shimbun on Feb. 22 that he did not handle accounting details. He has also bragged about not paying taxes.
The billionaire often said, “I don’t care about taxes. Only fools would pay them,” an acquaintance who has known Kawamoto for about 50 years told the newspaper.
Kawamoto splits his time between Hawaii and Japan. The eccentric tycoon has about 20 properties in Kahala, some of which are vacant and have fallen into ruin. He has also been busy turning another property on Kahala Avenue into a public garden.
Seventeen statues — a few close to 18 feet tall — have been positioned around the roughly 2-acre oceanfront property, most of which was once the estate of the late Hawaii resort developer Chris Hemmeter.
Kawamoto bought the site in 2005 and 2006 for a combined $30 million during an acquisition spree in which he paid close to $165 million for almost 30 homes on Kahala Avenue over the past 10 years.
Part of the plan he dubbed “Kahala Avenue Mission” was to rent nine homes to nine Native Hawaiian families for $150 to $200 a month, though complaints over housing discrimination led Kawamoto to curtail the plan and provide three Hawaiian families with free residences since 2007.
The other element of the plan was to create art and garden museums.
“In order to make this beautiful street, all the houses and gardens will be lit up in the evening so that people can enjoy the view at their own leisure,” Kawamoto said in a written statement in 2006.
But most of his creations have been unsightly.
Kawamoto crudely broke down portions of walls fronting the street, leaving rubble laying about. He also filled in swimming pools, he said for liability reasons, and often let vegetation grow wild. Some of his homes fell into disrepair and racked up city fines.