About a year ago, Shin Megami Tensei and Etrian Odyssey developer Atlus faced something of a predicament when their parent company, Index Corporation, filed for bankruptcy and had its stock delisted. Atlus survived the implosion and was eventually acquired by Sega, but Index Corporation’s founders have not been so lucky. This past Wednesday, Nikkei reported former Index CEO Masami Ochiai, along with his wife and former Index president Yoshimi Ochiai, have been arrested for suspected accounting fraud. Oh dear.
According to the report, the husband and wife duo were arrested due to their attempts to exaggerate earnings leading up to the collapse of the company by using what’s known as “round-tripping,” wherein a company sells its assets to another party with an agreement to buy it back at a later time, making it look like the company’s doing better than it really is.
And boy, was Index doing badly, eventually filing for bankruptcy last June with 24.5 billion yen in outstanding debt. The company’s owners were accused at the time of fraud and inflating sales numbers, and the company’s offices were raided after the Japanese Securities and Exchange Surveillance Commission caught wind of what was going on, making these arrests the latest in a long string of bad news related to Index’s woes.
Of course, the silver lining here is that Atlus seems to be doing fine under Sega’s umbrella, and they’re even releasing a new Persona game for the 3DS next week. But is this the end of Index Corporation’s fraudulent story? With investigations into Index’s business practices continuing in the coming months, only time will tell if this is the last of the bad news.