Prudential Life President Kan Mabara (right) attends a news conference with Bradford O'Hearn, president of Prudential Holdings of Japan, on January 23 in Roppongi, Minato Ward, Tokyo. (©Sankei by Shunsuke Sakamaki)
このページを 日本語 で読む
Senior executives of Prudential Life Insurance apologized on January 23 after it was revealed that employees had fraudulently obtained a total of ¥3.1 billion JPY (around $20 million USD) from customers by pitching fictitious investment schemes and other scams.
The Japan unit of United States-based Prudential Financial initially did not plan to hold a news conference when it released the investigation results on January 16. However, it decided to do so after calls mounted for greater accountability.
Prudential Life CEO and President Kan Mabara told a news conference in Tokyo, "We sincerely and deeply apologize for the discovery of serious and long-standing misconduct." He also announced that the company will establish an independent compensation committee to arrange refunds for affected customers.
Leadership Changes
Mabara will step down as president on February 1 to take responsibility and will move into an advisory role. Also attending the news conference was Bradford O'Hearn, president and CEO of parent company Prudential Holdings of Japan Inc, who said he would "take the lead in thoroughly strengthening management oversight."
Hiromitsu Tokumaru, a director who will succeed Mabara as president, stressed that "supporting victims will be the top priority" and pledged to carry out fundamental reforms to address corporate culture.
Tokumaru said the misconduct stemmed in part from compensation systems that fluctuate widely based on short-term performance and from income instability among sales staff.
Compliance and Countermeasures
To prevent a recurrence, the company will revise its compensation system, review compliance evaluation standards, and introduce additional compliance-related indicators. The compensation committee will examine each case individually and aims to provide full reimbursement for losses.
According to the company's investigation, more than 100 current and former employees approached customers with fictitious investment offers and other schemes, fraudulently collecting about ¥3.1 billion from roughly 500 customers. About ¥2.3 billion (around $15 million) of that amount has yet to be repaid.
RELATED:
- Chasing Nidec: What Audit Disclaimers and Special Alert Status Really Mean
- Corporate Governance Reform: Why Share Prices and ROE Aren't Enough
- Ten Years After Daughter's Suicide from Overwork, Mother Calls for More Reform
- Shiseido Unveils New Growth Strategy After Record Annual Net Loss
Author: The Sankei Shimbun
このページを 日本語 で読む
