News

Court Hands Suspended Sentence to ufotable Founder Hikaru Kondo for Tax Evasion

The Tokyo District Court handed a guilty verdict and sentence to anime studio ufotable's founder, representative director, and president Hikaru Kondo on the charge of violating the Corporation Tax Act and Consumption Tax Act by failing to pay 138 million yen (about US$1.25 million) in taxes. Kondo is sentenced to 20 months in prison, but the sentence is suspended for three years. (If Kondo remains in good behavior for three years, he will not serve time in prison.)

The court commented that Kondo's wife, who acted as the company's accountant, showed reluctance in manipulating the company's tax filing, but Kondo had insisted, which showed "strong intent" to commit the fraud.

On the company's website, ufotable issued a statement acknowledging the sentencing, apologizing to fans of the company and all related parties, and said that it will use the incident as an opportunity to move toward a more sustainable level of production that remains within legal bounds.

Kondo admitted to the charge of violating the Corporation Tax Act and Consumption Tax Act by failing to pay 138 million yen (about US$1.25 million) in taxes at a preliminary hearing by the Tokyo District Court on September 17. During the same hearing, Kondo issued an apology, admitting that he thought his tax evasion would "not bring trouble to [ufotable]."

The prosecution said in its opening statement that ufotable and Kondo hid part of the income from the company's cafes and merchandise from 2015 to 2018 in order to buffer against future downturns in business. The studio allegedly hid about 441 million yen (about US$4 million) in income.

After the formal indictment of Kondo and ufotable on July 9, ufotable acknowledged the indictment of the Tokyo Public Prosecutor's Office, and gave assurances that the company had already filed a corrected tax return and paid the appropriate amount.

Previous reports have varied slightly in the amount that ufotable owes: the formal indictment in July stated 137 million yen (about US$1.24 million) in taxes, while previous reports by The Mainichi Shimbun newspaper in 2020 alleged 139 million yen (about US$1.28 million) in taxes. Both of these accounts differ from the 138 million yen (about US$1.25 million) reported in September's preliminary hearing.

The Mainichi Shimbun reported last year that Kondo purportedly hid about 30% of the proceeds from some of ufotable's anime-themed restaurants in Tokyo and stored them in a private safe at home.

Bungeishunju's Weekly Bunshun Digital magazine reported in April 2019 that ufotable allegedly owes 400 million yen (about US$3.57 million) in taxes, citing a source from the Tokyo Regional Taxation Bureau. The report noted that ufotable is suspected of supposedly misappropriating funds raised from a charity auction for the 2011 Tōhoku earthquake, a violation of the Penal Code that carries a potential prison sentence of no more than 10 years. The Tokyo Regional Taxation Bureau conducted a search of ufotable's offices earlier in March that year as part of an investigation, but did not end up filing charges.

Kondo eventually resigned from his role of chairman of the executive committee for Machi Asobi, the Tokushima event for which ufotable was once the main organizer, in May 2019.

Kondo founded ufotable in 2000, and the studio is perhaps best known for its recent Demon Slayer: Kimetsu no Yaiba television anime and its accompanying hit film Demon Slayer – Kimetsu no Yaiba – The Movie: Mugen Train, as well as the various anime adaptations of Type-Moon's Fate franchise, including Fate/Zero and Fate/stay night: Unlimited Blade Works. The studio recently concluded the third and final film in the Fate/stay night: Heaven's Feel anime film trilogy in August. The studio has also made anime adaptations of Type-Moon's The Garden of Sinners, and the Katsugeki: Touken Ranbu television anime.

In addition, the company sells merchandise and goods for the various anime it has produced, and runs a number of cafés through which it sells some of its merchandise.

Source: TV Asahi News, ufotable's website via Otakomu