Fukuda Denshi’s chairman billed private life to the company — a US fund forced a recount

In May 2026, Fukuda Denshi, a listed Japanese medical-device maker, disclosed that its chairman Kotaro Fukuda, scion of the founding family, had improperly used company resources: for about five years the company garage held 28 of his private cars, for over a decade he used chauffeurs employed for company cars, and entertainment expenses with dubious business relevance were billed to the company. The internal investigation put the total at ¥154,497,155 over ten years.

Kaname Capital, a US asset manager and shareholder, called the tally “insufficient” and “understated.” It said 30 to 40 private cars had parked in a space only the chairman and his secretaries could enter, and estimated the chairman’s total benefit at ¥720 million, about ten times the company’s figure. It cited a dinner costing over ¥4 million including ¥3.8 million of Romanée-Conti wine, and claimed false bookings of seven figures ran several times a year, with entries above ¥400,000 dozens of times a month.

The company relented. Fukuda resigned as chairman on June 16; his disclosed director pay was ¥501 million, twice the president’s ¥253 million. On June 25 the company established a third-party committee to re-investigate the expense misuse and draft recurrence-prevention measures. The fight then moved to the committee itself: in August Kaname published an anonymous letter from an insider alleging the inquiry was being steered away from current executives, including president Daijiro Shirai, and from sales subsidiaries where misconduct allegedly extended.

By the end of August the committee had lost and replaced a member, with the fund demanding the investigation be thorough. What began as a family firm’s tidy self-audit had become a contested, activist-supervised probe — the scope, staffing and credibility of the company’s own investigation were now negotiated in public.

¥154.5M of private use confirmed over 10 years; the fund estimates ¥720M; dinners over ¥4M with ¥3.8M of wine; 28 private cars in the company garage

Founding-family control let the chairman treat company assets as personal property: a garage only he and his secretaries could enter existed for years without challenge.

The internal investigation was run by the people reporting to the man it examined, and produced the smallest defensible number.

Entertainment spending at a medical-device company sits on a blurred line between customer relations and private consumption, so questionable entries survived routine review for a decade.

External governance arrived only through an activist fund with the resources to do its own arithmetic and the tools to make the company absorb it.

A controlling founding family investigates itself last and least. An internal review’s number reflects the investigator, not the fraud — an outsider’s own arithmetic can move it tenfold.

The third-party committee was still working as of mid-September 2026, re-staffed after a member quit on August 31 — the same day Kaname published the anonymous letter questioning the inquiry’s independence. The fund says improper benefits reached ¥720 million, nearly ten times the company’s ¥154.5M finding, and alleges the misconduct extended beyond the former chairman to other executives and sales subsidiaries. The company has committed to recurrence-prevention measures through the committee, and the former chairman’s ¥501 million pay disclosure has kept the story on front pages.