Snow Brand execs deny fraud

Two former executives of the now-defunct Snow Brand Foods Co. pleaded not guilty on Wednesday to charges of fraudulently obtaining some 200 million yen (€1.7m) by falsely labelling meat to receive subsidies under a government beef buyback program, reports Kyodo News.

In the first hearing of the case at the Kobe District Court, Hiromi Sakurada, 61, and Masami Inoue, 60, denied the charges of conspiring to defraud the government by passing off foreign meat as domestic.

''I did not plan to swindle money or conspire to do so,''​ said Sakurada, who was a senior managing director. ''I learned of the fraud by our employees after the case was uncovered,''​ Inoue, a former managing director, added.

The prosecutors, in their opening statement, said the two conspired with five other Snow Brand Foods officials to falsely label beef in October and November to get 196 million yen in state subsidies. The subsidies were paid under the beef buyback scheme the government began following the discovery of mad cow disease in Japan last September.

Sakurada, Inoue and the others allegedly had an industry body - the Japan Ham and Sausage Processors Cooperative Association - buy about 280 tons of meat in the company's inventory, including 30 tons of imported beef which was not covered by the buyback program.

The prosecutors said Sakurada had told his subordinates after the case was uncovered in January to tell reporters that the false labelling was done without the knowledge of the company management. They also contended that Inoue had approved a subordinate's report on the false labelling of at least 3 tons of foreign beef.

The association paid Snow Brand Foods 196 million yen in January as part of the 311 million yen payment for the 280 tons of meat. Shigeru Hatakeyama, 56, and four other managers also implicated in falsifying beef labels will stand trial on Aug. 30.

The prosecutors have decided not to indict 12 other former Snow Brand Foods employees who allegedly followed their bosses' orders to label foreign beef as Japanese meat.

The government launched the beef buyback program after the discovery of bovine spongiform encephalopathy (BSE) in Japan and a plunge in sales of beef. Snow Brand Foods, a subsidiary of Snow Brand Milk Products Co., dissolved itself on April 30.