Enten controversy
Encyclopedia
The Enten controversy involved Kazutsugi Nami
, the chairman of Tokyo bedding supplier Ladies & Gentlemen (L&G), arrested by Japanese police on 5 February 2009. He and twenty-one other executives were accused of defrauding 37,000 investors of at least 126 billion yen (approximately US$1.4 billion) between 2001 and 2009. Nami is the inventor of a quasi-currency, "Enten", which he used to attract investors. Some sources put the total amount of the money involved as high as 226 billion yen, which would make it, if proven, to be the biggest investment fraud in Japanese history since Toyota Shoji, an investment group, defrauded investors of 202.5 billion yen in the late '80s.
In order to gain credibility and popularity, Nami's company used famous enka
singers such as Takashi Hosokawa
in their advertisements. In May 2008, Hosokawa was accused on the Japanese civil court for participating, but he insisted that he was not responsible for the content of their advertisement.
s and health food, and began accepting investment money in 2001. The company's established existence tricked many into believing it was stable. A 65-year-old woman who lost 30 million yen (about US$300,000) saved over four decades was quoted as saying: "I thought the company was fine as it was in business for a long time". Another woman, a 70-year-old who blamed herself for the loss of two million yen (about US$20,000), said: "I had fun and a lively life ... I was stupid. It's my fault as I was greedy."
100,000 (approx. £750, US$1,100). Enten was a virtual currency
which Nami expected to become legal tender
in the post-recession by which time he will also have become "world famous." Investors were promised 36% annual returns There was even an "Enten fair" during which participants sang the praises of Nami's investment plan. One woman described the existence of Enten as "wonderful", whilst another said: "It's like a dream, I can buy anything."
"Enten" were generated through his customers' mobile phones and could be used to purchase items online, including vegetables, futon
s, clothing and jewelry. In February 2007, L&G dividends were distributed in Enten, rather than in cash, which caused many lawsuits and cancellations of accounts. In October 2007, police searched L&G's headquarters in Tokyo, suspecting that the company had violated investment laws. The company declared bankruptcy in November 2007.
Nami denies allegations of any wrongdoing. He had built up a cult-like following
amongst his investors. Lawyers representing these victims say Nami believed he had a "divine decree" to "eliminate poverty from this world."
Kazutsugi Nami
' is a Japanese businessman and chairman of Tokyo-based bedding supplier Ladies & Gentlemen . He has been involved in a number of fraudulent schemes since the 1970s, and was arrested most recently on 4 February 2009 on suspicion of orchestrating a massive investor fraud involving the "Enten"...
, the chairman of Tokyo bedding supplier Ladies & Gentlemen (L&G), arrested by Japanese police on 5 February 2009. He and twenty-one other executives were accused of defrauding 37,000 investors of at least 126 billion yen (approximately US$1.4 billion) between 2001 and 2009. Nami is the inventor of a quasi-currency, "Enten", which he used to attract investors. Some sources put the total amount of the money involved as high as 226 billion yen, which would make it, if proven, to be the biggest investment fraud in Japanese history since Toyota Shoji, an investment group, defrauded investors of 202.5 billion yen in the late '80s.
In order to gain credibility and popularity, Nami's company used famous enka
Enka
is a popular Japanese music genre considered to resemble traditional Japanese music stylistically. Modern enka, however, is a relatively recent musical form which arose in the context of such postwar expressions of modern Japanese nonmaterial nationalism as nihonjinron, while adopting a more...
singers such as Takashi Hosokawa
Takashi Hosokawa
, born 細川貴志 on 15 June 1950, Makkari, Abuta District, Hokkaidō, Japan) is a Japanese male enka singer.In 1975, he debuted with song "Kokoro Nokori". Hosokawa immediately became one of the most popular enka and pop singers in Japan...
in their advertisements. In May 2008, Hosokawa was accused on the Japanese civil court for participating, but he insisted that he was not responsible for the content of their advertisement.
L&G
Ladies and Gentlemen, set up in 1987, originally sold futonFuton
Futon is an English word derived from Japanese , a term generally referring to the traditional style of Japanese bedding consisting of padded mattresses and quilts pliable enough to be folded and stored away during the day, allowing the room to serve for purposes other than as a bedroom...
s and health food, and began accepting investment money in 2001. The company's established existence tricked many into believing it was stable. A 65-year-old woman who lost 30 million yen (about US$300,000) saved over four decades was quoted as saying: "I thought the company was fine as it was in business for a long time". Another woman, a 70-year-old who blamed herself for the loss of two million yen (about US$20,000), said: "I had fun and a lively life ... I was stupid. It's my fault as I was greedy."
Enten
Since 2004 Nami had been issuing special electronic money which he referred to as to investors who paid at least ¥Japanese yen
The is the official currency of Japan. It is the third most traded currency in the foreign exchange market after the United States dollar and the euro. It is also widely used as a reserve currency after the U.S. dollar, the euro and the pound sterling...
100,000 (approx. £750, US$1,100). Enten was a virtual currency
Virtual economy
A virtual economy is an emergent economy existing in a virtual persistent world, usually exchanging virtual goods in the context of an Internet game...
which Nami expected to become legal tender
Legal tender
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency is a common form of legal tender in many countries....
in the post-recession by which time he will also have become "world famous." Investors were promised 36% annual returns There was even an "Enten fair" during which participants sang the praises of Nami's investment plan. One woman described the existence of Enten as "wonderful", whilst another said: "It's like a dream, I can buy anything."
"Enten" were generated through his customers' mobile phones and could be used to purchase items online, including vegetables, futon
Futon
Futon is an English word derived from Japanese , a term generally referring to the traditional style of Japanese bedding consisting of padded mattresses and quilts pliable enough to be folded and stored away during the day, allowing the room to serve for purposes other than as a bedroom...
s, clothing and jewelry. In February 2007, L&G dividends were distributed in Enten, rather than in cash, which caused many lawsuits and cancellations of accounts. In October 2007, police searched L&G's headquarters in Tokyo, suspecting that the company had violated investment laws. The company declared bankruptcy in November 2007.
Nami denies allegations of any wrongdoing. He had built up a cult-like following
Destructive cult
A destructive cult is a religion or other group which has caused or has a high probability of causing harm to its own members or to others. Some researchers define "harm" in this case with a narrow focus, specifically groups which have deliberately physically injured or killed other individuals,...
amongst his investors. Lawyers representing these victims say Nami believed he had a "divine decree" to "eliminate poverty from this world."