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Execs Tied to Japanese Beef Scandal

August 9, 2002

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TOKYO (AP) _ Hours after police raided its offices, Japan’s leading meat packer admitted Friday that two top executives were involved in a mislabeling scandal that has raised new concerns about Japanese corporate ethics and food safety.

The company said the executives had resigned.

The announcement came as investigators searched the files at Nippon Food for the second day. Japan’s Health Ministry has pledged to press criminal charges against its parent company, Nippon Meat Packers, if the investigation shows it abused a government program to buy domestic beef potentially tainted with mad cow disease to get it off the market.

In a hastily called news conference, Nippon Meat Packers president Hiroji Ohkoso admitted that the company sold the government untainted foreign beef as part of the buyback program in order to clear out ``excessive inventories.″

Ohkoso said two executives overseeing the operation had resigned, but stopped short of saying he would step down to take responsibility. The executives were identified as vice president Heihachiro Azuma and managing director Motoaki Shoji.

Sales of domestic beef have plunged since authorities here reported Asia’s first case of mad cow disease in September. The government has spent millions of dollars buying and disposing of local beef potentially contaminated with mad cow disease to restore public trust.

Since implementing the program, however, several companies have tried to milk it.

Japan’s No. 6 meatpacker Snow Brand Foods Co. admitted abusing the program by passing off imported beef as domestic beef, while meat processing firm Nippon Shokuhin Co. tried to pass off 122 tons of foreign beef tendons. Both companies have since collapsed.

On Wednesday, Nippon Meat Packers said it sold 930 tons of beef through an industry group acting on behalf of the government. The company later bought back 1.3 tons, all imported, without notifying the Agriculture Ministry.

Ohkoso also admitted Friday that the mislabeling scam was wider than previously thought, also taking place at two operations in the western regions of Ehime and Tokushima, as well as its branch in the western city of Himeji.

The Japanese outbreak of mad cow disease, a brain wasting illness formally known as bovine spongiform encephalopathy, as well as the government’s response has raised questions in Japan about corporate ethics and caused some jitters about food quality.

Dozens of department stores and supermarkets in Japan have announced they were withdrawing Nippon Meat Packers’ products from shelves. Several school districts also have halted using the company’s products.