Japanese investor sues business partner for fraud, deceit

A Japanese investor has sued another investor for allegedly defrauding him in a loan and stock purchase deal for a corporation.

Mamoru Ueda sued Hidehito Hida and Mugen Corp. for fraud, deceit, and misrepresentation.

Ueda, through counsel Mark A. Scoggins, asked the Superior Court to declare that Hida and Mugen Corp. have cancelled the Stock Transfer Agreement by their failure to perform under the terms of the oral and written agreements.

Ueda demanded payment of ¥27.3 million and $38,000 in actual damages plus $150,000 in liquidated damages.

The plaintiff also sought attorney’s fees and court costs.

Scoggins stated in the complaint that in June 2006, Ueda loaned ¥2 million in cash to Hida. In July 2007, he loaned an additional ¥1 million in cash to Hida.

In 2007, the plaintiff made six additional loans directly to Hida by wire transfers: ¥200,000; ¥150,000; ¥50,000; ¥150,000; ¥1 million; ¥150,000.

Scoggins said that his client also made two additional loans—¥1.5 million and ¥500,000—to Hida in order to pay off the latter’s debts to Kazeo Misaki.

Scoggins said that between mid-2007 and the end of 2007, Ueda made loans in excess of ¥6.7 million.

In late 2007 and early 2008, Hida offered to sell Mugen Corp. and Waft by the Sea to Ueda.

The lawyer said that because Hida was unable to pay back the money Ueda had loaned him, the two men agreed that the loans in excess of ¥6.7 million would be applied to the purchase of Mugen Corp. and Waft by the Sea.

On Jan. 12, 2008, Hida and Ueda entered into a written Stock Transfer Agreement whereby Hida promised to transfer 180,000 shares of stock in Mugen Corp. to Ueda for consideration in the amount of $180,000.

In addition to the more than ¥6.7 million paid by Ueda to Hida, the plaintiff made several more payments to Hida for the shares in Mugen Corp. between January and July 2008 in the amount of ¥14.7 million.

Scoggins said his client paid more money between January to July 2008 in the amount of $38,000 and ¥3.6 million.

The lawyer said Hida deceived and defrauded Ueda by inducing Ueda to lend Hida monies that he did not intend to repay.

“Mr. Hida also deceived and defrauded Mr. Ueda by failing to apply monies loaned to him to the purchase of stock in Mugen Corp. and by inducing him to pay more monies for stock that Mr. Hida never intended to transfer,” he said.