MITO, Jul 19 (News On Japan) –
Trying to unravel the issue of discovering a successor, a historic natto producer was taken over, solely to have its funds siphoned off in a rip-off that’s turning into more and more frequent in Japan.
We carried out an in-depth investigation of the corporate exploiting the M&A system. What have they got to say for themselves? TBS Insiders is accepting info on points with small enterprise M&As and varied whistleblower studies. Please share your info with us.
Located in Ibaraki Prefecture, the historic natto producer Kinzakura Foods employs about 50 folks and produces 5 million packs of natto per thirty days.
Yukio Nagata (61), the president of Kinzakura Foods.
Kinzakura Foods President Yukio Nagata: “Whether customers become repeat buyers depends largely on the taste. We are confident in our product.”
However, final 12 months, the corporate confronted a dire disaster.
Kinzakura Foods President Yukio Nagata: “At its worst, sales dropped by 40%. It was tough. Continuing operations would have inevitably led to the company’s bankruptcy.”
What precisely occurred?
Targeted: Small Businesses Seeking Successors
There are over 3 million small companies nationwide, with one-third dealing with problems with getting older and lack of successors.
President Nagata additionally struggled to discover a successor and determined to undergo with an M&A, promoting the corporate to a different agency to take over its administration.
Kinzakura Foods President Yukio Nagata: “I wanted to keep the company in the local area, and the best way to do that was to partner with a capable company while it still had a solid business foundation.”
A serious brokerage agency really useful an funding firm known as Lucian Holdings, describing it as an organization with numerous administration and round 30 subsidiaries.
This picture is from the day the M&A was concluded final March. President Nagata is pictured with Lucian Holdings’ CEO and director. At that point…
Kinzakura Foods President Yukio Nagata: “My greatest hope was that the company would grow steadily in line with the contract.”
However, proper after transferring administration…
Kinzakura Foods President Yukio Nagata: “At first, I was outraged. It was nothing like the promises made, and their actions were haphazard. Including financial matters, it was unacceptable. I was extremely upset.”
Lucian Holdings confirmed little curiosity in managing the natto manufacturing. Their first directive was to switch roughly 35 million yen from Kinzakura Foods’ account to Lucian’s.
Moreover, a part of Kinzakura Foods’ month-to-month gross sales was additionally reportedly despatched to Lucian, and…
Kinzakura Foods President Yukio Nagata: “Employee salaries were delayed, and social insurance and taxes went unpaid.”
Kimura, the manufacturing unit supervisor who has labored in natto manufacturing for 30 years, stated he could not perceive what was occurring.
Factory Manager Kimura: “It was a bolt from the blue, completely unexpected. We were all filled with anxiety about the future.”
Eventually, the CEO and director of Lucian Holdings turned unreachable, and their whereabouts unknown.
As a consequence, the 36 million yen that was speculated to be paid to President Nagata on the time of the contract was by no means paid. The accountability for the corporate’s mortgage ensures, which had been speculated to switch to Lucian, remained with President Nagata.
In the top, President Nagata repurchased the shares and returned as president. With the cooperation of native banks and enterprise companions, he managed to rebuild the corporate.
Kinzakura Foods President Yukio Nagata: “It took about a year to normalize operations by liquidating assets and improving cash flow through measures like cashing out my life insurance.”
What had been Lucian Holdings’ true intentions? We managed to contact a present government (30) of Lucian Holdings.
Lucian Holdings Current Executive: “This is the main room where documents and materials are kept.”
Located in a small workplace inside a multi-tenant constructing in Ibaraki Prefecture, this was Lucian Holdings’ headquarters. Now, it is plagued by scattered invoices.
Lucian Holdings Current Executive: “There are just too many bills for things like phone, electricity, and taxes to handle.”
This government, who appeared within the picture with President Nagata on the signing ceremony, claims to have been instructed to deal with transfers from acquired firms. He held a titular position solely.
Lucian Holdings Current Executive: “This is my business card from when I was supposedly with Kinzakura Foods. There were many instances where people were given executive titles without actually holding any real position.”
Lucian Holdings was managed by the CEO and director, whereas the executives claimed they had been used.
Lucian Holdings Current Executive: “I had no idea what tasks I would be assigned or the outcomes. I wondered why I was photographed next to the former president.”
In about two years, Lucian Holdings acquired 37 firms, focusing on these with vital deposits.
Lucian Holdings Current Executive: “The CEO was always looking for new companies to buy, saying ‘We’ve acquired this one, we’ve acquired that one.’ They were actually just lining their own pockets…”