The Tokyo District Court has found Studio ufotable founder and former president Hikaru Kondo and the anime studio for violating the Corporation Tax Act, and the Consumption Tax Act and handed down the final verdict on Dec 10, 2021.
Kondo has been sentenced to 1 year and 8 months in prison with a suspended sentence of 3 years and the studio is fined 30 million yen; ufotable confirmed the news on their website.
“Today, our company and a representative have been convicted of violating corporate tax laws. We sincerely apologize to our fans who have been supporting our works, as well as to all other parties involved, for any concern or inconvenience caused by this.
We will take this incident as an opportunity to make further efforts to ensure our compliance with laws and regulations as well as proper management to create a production environment that is sustainable to create better works.”
Kondo said on the delivery of the verdict that “it is hard to avoid strong condemnation as a manager of a business when faced with an uncertain financial future.”
In a statement from the Tokyo District Court, they said that Kondo’s wife was the accountant for the company and was reluctant in falsifying the books in order to evade taxes even as he “persistently instructed” her to do so, proving that “his intention to evade taxes was firm.”
Prosecutors already looking to charge with a 20-month prison term without a suspended sentence for the studio founder after the first trial for Kondo on Nov 2.
According to TBS, the prosecution claimed that Kondo directed the company to fraudulent accounting when large profits were made and that the cover-up was “thorough and ingenious.”
He was sentenced to 1 year and 8 months in prison for “denying the corporate responsibility of paying taxes in good faith.”
Kondo admitted to the charges laid out of violating the Corporation Tax Act and Consumption Tax Act by failing to pay 138 million yen (about US$1.25 million) in taxes at a preliminary hearing by the Tokyo District Court on September 17.
During the same hearing, Kondo issued an apology to his fans and other stakeholders, admitting that he thought his tax evasion would “not bring trouble to [ufotable].”
The prosecution said in its opening statement that ufotable and Kondo hid part of the income from the company’s cafes and merchandise from 2015 to 2018 in order to buffer against future downturns in business. The studio allegedly hid about 441 million yen (about US$4 million) in income.
After the formal indictment of Kondo and ufotable on July 9, ufotable acknowledged the indictment of the Tokyo Public Prosecutor’s Office and gave assurances that the company had already filed a corrected tax return and paid the appropriate amount.
The Mainichi Shimbun reported last year that Kondo purportedly hid about 30% of the proceeds from some of ufotable’s anime-themed restaurants in Tokyo and stored them in a private safe at home.