AIJ moved missing pension funds to Caymans, Hong Kong

The Yomiuri Shimbun

About 200 billion yen in pension funds managed by AIJ Investment Advisors Co., most of which has vanished, was moved among overseas private investment trust funds and financial institutions, including those in the Cayman Islands and Hong Kong, according to Securities and Exchange Surveillance Commission sources.

The commission plans to unravel the complex flow of money from the Tokyo-based investment advisory firm and how the money disappeared.

According to sources close to the company, AIJ used most of the 200 billion yen to buy a private investment trust in the Cayman Islands through ITM Securities Co., a Tokyo-based company with close ties to AIJ. This money had been entrusted to AIJ for investment by its client companies, which were mainly small and midsize companies.

However, the funds were believed to have been transmitted to multiple financial institutions, including a bank in Hong Kong.

The private investment trust in the Caymans was established by a person closely associated with AIJ. A foreign trust bank in Bermuda also was believed to be involved in the funds management, the sources said.

When the commission inspected AIJ last month, some accounting documents that could have detailed the investment performance of the trust in the Caymans could not be located.

Companies managing pension funds that require a stable yield usually use domestic trust banks. An AIJ official was quoted by the commission as saying, "We don't know accurately how our investments performed overseas."

AIJ has admitted submitting false business reports to the Finance Ministry's Kanto Local Finance Bureau, a violation of the Financial Instruments and Exchange Law.