Tokyo tax bureau flags ¥580m unreported at Southern All Stars member's firm
Version 2: Sankei Shimbun set out the transaction at the centre of the finding — a February 2021 share purchase for 588 million yen followed by a sale of the devalued shares to Sekiguchi personally for 1.5 million yen — and Sekiguchi's company then apologised on its website saying the full additional tax had been paid, with the band's agency Amuse also issuing a statement, after earlier reporting that neither side had commented.
In short
The Tokyo Regional Taxation Bureau has pointed out unreported income at Nohohon, a music-related company headed by Southern All Stars bassist Kazuyuki Sekiguchi (70). Asahi Shimbun, Nikkei, Sankei and Livedoor News put the amount at 586.5 million yen over the three years to the fiscal period ended September 2023, while NHK, Nippon TV News and TBS said about 580 million yen, with additional tax of about 53 million yen. Sankei reported the finding concerns a February 2021 share purchase, and Sekiguchi's company has since apologised on its website and said the tax was paid in full.
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The Tokyo Regional Taxation Bureau has pointed out unreported income at Nohohon, a music-related company headed by Kazuyuki Sekiguchi, the 70-year-old bassist of the band Southern All Stars, according to the outlets. Asahi Shimbun, Nikkei, Sankei Shimbun and Livedoor News put the amount at 586.5 million yen over the three years to the fiscal period ended September 2023, while NHK, Nippon TV News and TBS NEWS DIG said it was about 580 million yen. The additional tax, including the underreporting penalty tax, is about 53 million yen. [ 1 , 2 , 3 , 4 , 5 , 6 , 8 ]
Sankei Shimbun reported that in February 2021 the company acquired shares for 588 million yen that had been prepared by its then-advisory tax accountant firm, received dividends from that company, and then sold the sharply devalued shares to Sekiguchi personally for 1.5 million yen. The 586.5 million yen difference from the purchase price was booked as a loss, reducing corporate income and lowering the tax bill in the following periods as well. Sankei and Nippon TV News said the bureau judged that the combined share and dividend transactions had no economic rationality and improperly reduced the tax burden; Nippon TV News described them as having no substance. [ 4 , 5 ]
On October 4 the company apologised on its official website. Livedoor News quoted Sekiguchi as saying he takes the matter seriously and apologises from the heart, that he had been told by the tax accountant that the arrangement was legal, and that the full additional tax had already been paid. Yahoo! News also reported the apology and said the band's agency, Amuse, issued a statement as well. The apology came after Nippon TV News said at 11:51 that neither Sekiguchi's side nor the tax accountant's side had commented. [ 4 , 6 , 7 ]
Asahi Shimbun quoted a lawyer for Sekiguchi's side as saying the company had been told by the tax accountant that the transaction was a way to legally reduce the tax burden, but that it was not informed of the mechanism of the transactions and did not grasp the concrete method. A lawyer for the tax accountant told Asahi that the transactions were not carried out for the purpose of producing a deductible loss and were based on a different economic purpose, adding that confidentiality obligations prevented a specific answer. [ 1 ]
Nippon TV News reported that the transaction is believed to have been proposed by the tax accountant as a “tax-saving scheme” and to have been introduced to about 30 other companies as well. No other document in this set states that figure. [ 4 ]
Asahi Shimbun reported that Nohohon is based in Tokyo's Meguro Ward and that its registered businesses include ukulele sales, a music school, music production and copyright management, while NHK described the company as managing Sekiguchi's copyrights. [ 1 , 2 , 5 ]
Why it matters
The case turns on a tax-saving arrangement that a tax accountant is reported to have proposed, and Nippon TV News said the same scheme is believed to have been introduced to about 30 other companies, which could widen scrutiny beyond this one firm. The tax accountant's lawyer has disputed the bureau's view of the transactions, so how such arrangements are treated may not be settled by this case alone. The apology by a band member's company and by the group's agency also makes the matter a reputational one for a well-known act.
Key facts
- The Tokyo Regional Taxation Bureau pointed out unreported income at Nohohon, a music-related company headed by Southern All Stars bassist Kazuyuki Sekiguchi (70) [ 1 , 2 , 3 , 4 , 5 ]
- Asahi Shimbun, Nikkei, Sankei and Livedoor News reported the unreported amount as 586.5 million yen over the three years to the fiscal period ended September 2023; NHK, Nippon TV News and TBS said about 580 million yen [ 1 , 2 , 3 , 4 , 5 , 6 , 8 ]
- The additional tax, including the underreporting penalty tax, is about 53 million yen [ 1 , 3 , 4 , 5 , 6 ]
- Sankei Shimbun and Livedoor News reported that in February 2021 the company bought shares for 588 million yen, received dividends, sold the devalued shares to Sekiguchi personally for 1.5 million yen and booked the 586.5 million yen difference as a loss [ 5 , 6 ]
- Sekiguchi said on the company's website that he takes the matter seriously and apologised, that the tax accountant had told him the arrangement was legal, and that the full additional tax had already been paid [ 6 , 7 ]
- Nippon TV News reported the transaction was proposed as a “tax-saving scheme” and is believed to have been introduced to about 30 other companies [ 4 ]
- Nohohon is based in Meguro, Tokyo, and Asahi Shimbun reported its registered businesses include ukulele sales, a music school, music production and copyright management; NHK described it as managing Sekiguchi's copyrights [ 1 , 2 , 5 , 6 ]
Confirmed by several sources
- The Tokyo Regional Taxation Bureau pointed out unreported income at Nohohon, a music-related company headed by Southern All Stars bassist Kazuyuki Sekiguchi, over the three years to the fiscal period ended September 2023 [ 1 , 2 , 3 , 4 , 5 , 6 , 8 ]
- The additional tax, including the underreporting penalty tax, is about 53 million yen [ 1 , 3 , 4 , 5 , 6 ]
- Nohohon is based in Tokyo's Meguro Ward [ 1 , 5 , 6 ]
- The finding relates to a loss booked on share transactions connected to the company's tax accountant [ 1 , 3 , 4 , 5 , 6 ]
- Sekiguchi's side has already paid the additional tax [ 1 , 4 , 6 , 7 ]
Still unclear
- The exact amount of unreported income Asahi Shimbun, Nikkei, Sankei and Livedoor News reported 586.5 million yen, while NHK, Nippon TV News and TBS said about 580 million yen
- Whether the share transactions had real economic substance Nippon TV News and Sankei said the tax bureau treated the transactions as lacking substance or economic rationality, while the tax accountant's lawyer told Asahi Shimbun the transactions were not carried out to create a deductible loss and had a different economic purpose
- Whether the scheme was offered to about 30 other companies Reported only by Nippon TV News, attributed to people familiar with the matter
- The content of the statement by the band's agency, Amuse Mentioned only by Yahoo! News, citing FNN Prime Online, which said the agency also apologised without giving its text
- Why the company's public apology came after earlier reports that neither side had commented Nippon TV News said at 11:51 on October 4 that neither Sekiguchi's side nor the tax accountant's side had commented, while the company's apology was reported later the same day by Livedoor News and Yahoo! News
- The company apologised on its official website on October 4 Reported by a single source so far
What local media are saying
Timeline, local time
- Asahi Shimbun reports the tax bureau's finding, quotes lawyers for both Sekiguchi's company and the tax accountant, and says the tax has been paid [ 1 ]
- NHK News reports that the company managing Sekiguchi's copyrights was found to have underreported more than 580 million yen [ 2 ]
- Nikkei reports the 586.5 million yen figure and the tax accountant's advice [ 3 ]
- Nippon TV News reports the case, the roughly 30 other companies and says neither side had commented so far [ 4 ]
- Sankei Shimbun publishes the transaction details, including the February 2021 share purchase and the sale to Sekiguchi personally [ 5 ]
- Livedoor News reports Sekiguchi's comment on the company's website apologising and saying the full additional tax was paid [ 6 ]
- Yahoo! News reports the company's apology and says the band's agency, Amuse, also issued a statement [ 7 ]