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Lawyer seeks audit of Japanese company
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Posted on May 29 2000
Lawyer James H. Grizzard has asked the Superior Court to order Suwaso Inc. and its president and cheif executive officer Akio Hara to hire a certified public accounting firm that will audit the Japanese company amid charges of illegal financial transactions.
Despite a board resolution on Sept. 21, 1998 that a certified accounting firm be appointed to audit the company., Mr. Hara has refused to do so which was in violation of his fiduciary obligation to the corporation and its shareholders, Mr. Grizzard said.
In a civil suit, Mr. Grizzard emphasized the need to investigate and rectify the alleged financial improprieties that have been reported in a separate civil case filed before the Superior Court in mid-1998 entitled Hyakumata & Co. Ltd. v. Suwaso Corp.
The earlier civil case revealed that Suwaso Inc. signed loan agreements obligating it to repay monies which it never received. The company had also allowed the withdrawal of large amounts of money by officers and employees which were stashed away to Japan.
Mr. Grizzard said the 1998 civil suit also showed that the 1997 financial statements were revised without the approval of, or notice to any of the officers or directors to increase the corporation’s general and administrative expenses from $744,085 to $3,128,992.
In the Sept. 1998 meeting, the board of directors of Suwaso noted the need for an accounting to determine how much money Hyakumata Co. Ltd. has invested in Suwaso and taken away from the corporation as large amounts of cash have been apparently withdrawn without any recording.
The board also wanted to find out how much money has been actually spent in the construction of the hotel, golf course and other improvements to the Coral Ocean Point Project.
According to Mr. Grizzard, an audit of Suwaso Corp. would at least determine if it has contributed any funds to the construction of the Coral Ocean Point Project, specifically the $3 million payment to Kam Corp. which Hyakumata claims were from its funds. However, the board’s own investigation concludes that the money spent were from Suwaso Corp.
