Executives from Japan’s Orix charged with fraud in Australia

The Australia head of Japan’s Orix Corporation has been charged with fraud and money laundering. Orix is a large, highly diversified Japanese financial services and investment banking company operating in about 36 countries. The company had revenues of JPY 1.3 Trillion in 2014. Orix Australia operates an AUS$1.2 billion vehicle supply network and is wholly owned by the Japanese parent company.

The Australian CEO was arrested on April 2nd by New South Wales (NSW) Police on four counts of fraud and one count of money laundering for his alleged involvement in the payment of AUS$504,900 to a fleet manager of Coca-Cola Amatil between June last year and this February in exchange for contracts. A second executive, Orix’s fleet manager, and the Coca-Cola Amatil fleet manager have also been arrested and charged. Orix has suspended the arrested executives.

The scale of the alleged payments marks one of the biggest corporate scandals to hit Australia in recent years, according to The Australian newspaper.

NSW Police have suggested the alleged corruption between Orix and Coca-Cola Amatil extends much further than has been disclosed to date and that investigations into payments “totalling millions of dollars and dating back several years” are continuing.
NSW Police launched their investigation last year after Coca-Cola Amatil reported “suspicious activity” in the management of its vehicle fleet.

Orix Corporation, which is listed on the Japan Stock Exchange and the New York Stock Exchange, said it had launched an investigation into the alleged corruption. An Orix spokesman said the group was also looking at investigating alleged corruption beyond Australia but declined to comment further.

The two arrested Orix representatives were also in charge of Orix Corporation’s international vehicle leasing network, which covers 18 countries including India, China, Indonesia, Pakistan and Kazakhstan.

Orix and four other fleet service giants including ARI Fleet, North America’s largest fleet management company, and South America’s Localiza — form part of a global alliance called Global Fleet Services (GFS). Orix company web pages showed the arrested chief executive is both Orix’s “lead representative” to GFS and a member of the GFS board.

Through GFS, Orix Corporation operates in China, Indonesia, Egypt, Malaysia, Singapore, South Korea, Sri Lanka, Taiwan, Philippines, Oman, Pakistan and Kazakhstan.

The arrested ceo was quoted heavily in a book about Orix Corporation published last year describing how corruption was “the biggest threat to business” and how he believes in “complete transparency, nothing less”.