Source – https://news.yahoo.co.jp/articles/d60a8867bdb5c6da90bbed1d8a910d4bff63b23a
Subcontractor “taking the brunt of employee’s debts”, Rakuten Mobile in financial crisis due to contract termination.
A subcontractor is in financial crisis due to an alleged 4.6 billion yen racketeering scandal involving an employee of Rakuten Mobile. Since Rakuten terminated contracts with suppliers who had close ties to the employee, the cash flow of the subcontractors linked to the employee has been deteriorating in a chain reaction. The company’s fraudulent orders have been passed on to the subcontractors, who are in a weaker position.
The current situation of Rakuten Mobile and its contractors and subcontractors
On September 2, 2022, Rakuten Mobile announced the dismissal of the employees involved in the fraud. According to the sources, the employee allegedly conspired with executives of two logistics companies, Nippon Logistec (Chiyoda-ku, Tokyo) and TRAIL (Minato-ku, Tokyo), with which Rakuten Mobile does business, to charge Rakuten Mobile additional fees in the form of consulting and other charges. The loss is estimated to be as much as 4.6 billion yen. Upon discovering the fraud, Rakuten suspended transactions with the two companies and applied to the court for provisional seizure of their bank accounts, which was approved.
The contract was terminated by Rakuten Mobile, and the employees will be off work from tomorrow.”
On August 31, 2022, two days before the employee’s dismissal was announced. On August 31, 2022, two days before the announcement of the layoffs, employees of subcontractors at construction sites of Rakuten’s cell phone base stations and warehouses where materials were stored were told simultaneously by their supervisors and the main contractor that they would be laid off from work.
◇Failure to collect wages and rejection of remedies.
Nippon Logistics had been commissioned by Rakuten to manage and transport parts and materials used in base station installation work. The majority of the company’s sales come from orders placed by Rakuten, and it also has many subcontractors. Shortly after its deposits were seized, the company was forced to apply for civil rehabilitation. TRAIL, which had been commissioned by Rakuten to install base stations, was also forced to suspend its business, as Rakuten accounted for the majority of its transactions. As a result, the subcontractors that were hanging on to the two companies were forced into a chain reaction of bankruptcies one after another.
In late August of last year, the first subcontractor, Shinwa (Fukuoka Prefecture), which was responsible for the installation of base stations in the Kyushu region, was suddenly ordered by TRAIL employees to stop construction work and leave the site immediately. The company was told by TRAIL that it could not pay the 140 million yen in completed construction wages because its deposit was seized.
The materials and manpower that had been secured for the construction work were left in limbo. The company’s funds were exhausted by paying rent for parts warehouses, payments to suppliers, and other expenses. About 30 employees had to be laid off. President Shintaro Tsutsumi, 42, repeatedly asked Rakuten and TRAIL for a bailout, but received no response.
Last December, Shintaro Tsutsumi filed a lawsuit against TRAIL, demanding payment of approximately 140 million yen in unpaid debts. President Tsutsumi is angry, saying, “Why should a subcontractor that has diligently supported our business bear the brunt of fraud committed by Rakuten employees?
IMAX (Sagamihara City, Kanagawa Prefecture), a second-tier subcontractor that was entrusted by Nippon Logistics to manage and transport parts and materials through TRAIL, also suffered from the fraud and went bankrupt at the end of last year. About 500 employees are believed to have been laid off nationwide, and there has been a string of unpaid wages and compensation for lost work time. Some employees have filed for relief with the Tokyo Labor Relations Commission, and the turmoil continues.
A woman in Chiba Prefecture, 51, who was a contract employee of IMAX, has not received her salary of approximately 200,000 yen for the month of August last year. She has been searching for a new job since September, when she was laid off, but has yet to find one. The women point out that “Rakuten is also responsible for allowing such sloppy transactions,” and are seeking redress.
The woman is seeking remedial measures.
Hideki Mizuno, a lawyer specializing in labor issues, said, “While it is unavoidable to terminate contracts with suppliers suspected of wrongdoing, Rakuten should take steps to prevent its subcontractors from going bankrupt, such as ordering work directly from them, as a matter of moral responsibility for a major corporation.
Rakuten commented to the Mainichi Shimbun, “We are not in a position to take any action or get involved in any way with regard to suppliers who have been entrusted with further work by individual suppliers. Nana Hayashida, Ryu Endo
Translated with www.DeepL.com/Translator (free version)
3 comments
What an absolute clusterfuck. A lot of innocent employees were put in a terrible situation.
2022 written as 22年 was translated as Heisei 22 which is 2010.
In case anyone else was confused..
I think the “financial crisis” was taking place well before this