US$212 million missing at Chinese affiliate of Japan’s Daiwa House
- Economists say the suspected fraud has raised alarm bells at some Japanese companies over the pitfalls of doing business in China
In a statement to The South China Morning Post, the Osaka-based company said that an employee in the accounting section of Dalian Daiwa Zhongseng Real Estate had identified a significant discrepancy between the company’s bank deposits and the amount indicated in its official accounts.
In an audit, conducted with a financial institution, Daiwa House was able to confirm that cash had been improperly withdrawn through a series of online banking transactions that dated back to 2015.
The company, which builds and sells apartment complexes in China, has requested that investigators pursue criminal charges against three people at the company who are believed to have been behind the transactions. The three suspects have not been named but Daiwa House said two are members of the board of the joint venture while the third worked in the accounting department.
Set up in July 2005, the affiliate is 83.65 per cent owned by Daiwa House and the Dalian Zhongsheng Group owns the remaining 16.35 per cent. Capitalised at 3.3 billion yuan, the company reported sales of 1.8 billion yuan in the year to the end of December 2018.