Reiwa 4 (Wa) No. 1882 Breach of Trust Case

In 2025, the Tokyo District Court adjudicated a breach of trust case stemming from an indictment in Reiwa 4 (2022). The defendant, Park Jin-woo, former president of Tokyo Advanced Materials Corporation's South Korean subsidiary, was accused of authorizing illicit low-interest loans worth approximately 1.8 billion yen to a Korean affiliate without headquarters' approval. The Tokyo Special Investigation Division argued that Park violated his fiduciary duty, causing severe financial damage and undermining shareholder trust. The case drew intense scrutiny due to its cross-border nature and timing amid sensitive Japan-South Korea economic relations. The defense contended the transactions fell within ordinary business discretion and challenged jurisdictional reach. The court ultimately found Park guilty, spotlighting governance loopholes in overseas subsidiaries.

The Tokyo District Court sentenced Park Jin-woo to three years in prison, suspended for four years, and ordered partial restitution of the misappropriated funds.

The main disputes centered on whether the defendant's actions constituted a criminal breach of fiduciary duty or fell within legitimate business judgment, and whether Japan's criminal code properly extended to financial decisions executed via a Korean subsidiary under differing local legal standards.

The verdict intensified public and corporate demand in Japan for stricter oversight of overseas operations. In South Korea, media outlets criticized the ruling as politically influenced, exacerbating economic distrust between the two nations and prompting reviews of bilateral investment protocols.