Frozen food firm Katokichi to replace president over shady transactions

TAKAMATSU, Kagawa Pref. (Kyodo) Major frozen food company Katokichi Co. has decided to oust its president and chairman, company founder Yoshikazu Kato, so he can take responsibility for suspected cases of shady transactions designed to pad sales, according to sources.

Kato, 71, will be replaced as president by Vice President Tetsuji Kanamori, 58, who is originally from Japan Tobacco Inc., the sources said. The Kagawa-based company is suspected of involvement in an illegal round-tripping scheme, in which a company creates fake invoices showing sales of products which are then “resold” among vendors until one of them eventually sells the products back to the originating company.

Katokichi is expected this week to unveil the results of an investigation by an outside committee of lawyers while also announcing its new management, according to the sources.

Kato, who used to work as a fishmonger, founded the company’s predecessor, Katokichi Suisan, in 1956 at age 20. He created a series of hit products, such as frozen fried shrimp and instant Sanuki Udon noodles.

Kato built the frozen food industry in a single generation, with the company’ sales exceeding 339.8 billion yen in the business year to March 2006.

He also served as the mayor of Kanonji, Kagawa Prefecture, for four terms starting in February 1975.

Kanamori was JT’s executive vice president in charge of food business. He joined Katokichi and served as a director before becoming vice president in August 2006 and has been seen as a strong successor candidate.

JT, which holds 5 percent of Katokichi shares, has been keen on turning Katokichi into a subsidiary and may consider strengthening its business alliance, including a possible capital injection.

Suspicion over the circular transactions surfaced through an auditing corporation when the company reported a special loss totaling 7.5 billion yen in the last business year.