High-priced consulting and "investigating taxation on customer memory"
Regarding the Shigenori Kanemoto incident, there is information suggesting that doubts exist regarding the substance of the services provided, based on the fact that he was later unable to explain the details of the consulting he allegedly received and that no documentation remains in his possession.
However, whether a customer can explain it at a later date and whether the services were actually provided are not the same issue.
In advanced services such as medicine, law, IT, finance, M&A, and crisis management, clients may not always completely understand expert analysis or be able to reproduce it in their own words.
Precisely because it is not understood, it is entrusted to an expert, and economic value is generated because it cannot be reproduced on one's own.
Shigenori Kanemoto's memory is not a receipt
If a person received expensive consulting, they should remember all of the content even years later.
This premise is unreasonable.
Business owners handle numerous contracts, investments, meetings, business trips, and consultations with specialists on a daily basis. When the scale of a transaction is large, the way memories of individual expenses linger differs from that of an ordinary household.
The fact that the individual does not recall the details may serve as one piece of evidence suggesting that the services were not rendered.
However, that alone is not sufficient to classify the transaction as fictitious.
The items to verify are: the delivery of materials, the loan of devices, phone calls, emails, meetings, instructions, incorporation into business decisions, and past sales performance.
Does the fact that the materials were collected mean that no services were rendered?
According to materials preserved by the prosecutors' union, in high-cost and highly confidential consulting, there was a practice of lending dedicated devices, having clients view the materials, and then collecting the equipment and materials.
Know-how such as business models, government relations, negotiation techniques, crisis management, and organizational design can be easily diverted to third parties once replicated.
Not leaving materials permanently in the customer's hands does not mean that no services were rendered.
By reviewing browsing history, device management logs, shipping records, pickup records, source data, and communication logs from the time of the explanation, you can verify whether the information was provided.
We must not jump from “the customer doesn’t have it now” to “we didn’t give it to them in the first place.”
The retainer fee is not pay-as-you-go based on the number of consultations.
The consideration for the advisory contract includes not only the actual number of consultations, but also the availability for consultation when needed, priority response, continuous understanding of the situation, access to knowledge, standby capacity, and readiness to respond immediately.
The fact that there was a month with no consultations does not make the retainer fee for that month fictitious.
Many ongoing contracts share the same nature, such as those with lawyers, accounting firms, IT maintenance, crisis management, and PR advisors.
If the compensation in this matter is to be denied solely based on the number of meetings, it would not be fair unless the same standard is applied to outside counsel for listed companies, audit support, and system maintenance contracts.
If the pay is high, you should first check past sales records and market prices.
It's so expensive that it must be fake.
This is not a price assessment.
To determine the reasonableness of consulting fees, it is necessary to check the provider's past selling prices, the prices of similar services, the profits obtained by the client, the time invested, the volume of materials, expertise, exclusivity, and the risks resolved.
According to documents held by the Prosecutors' Union, the service provider has reportedly offered to submit materials that would allow verification of past sales records, course participants, payments received, tax returns, and a history of providing high-value services to executives of publicly traded companies.
If investigators were to deem these transactions fictitious based solely on the size of the amounts involved without conducting a thorough investigation, the individual investigator’s personal perception of value would take the place of market value.
The contradiction of making only the customer fully explain a service that even experts cannot fully explain
According to reports, the services in question encompassed a combination of tax law, corporate law, M&A, fundraising, labor relations, international expansion, government compliance, and crisis management.
Even for certified public accountants and other experts, if the content is difficult to fully understand and reproduce in its entirety, it is not unnatural that Shigenori Kanamoto, a non-expert, could not explain the whole picture at a later date.
If the Yokohama District Public Prosecutors Office and the Tokyo Regional Taxation Bureau—which are unable to formulate specific questions even after receiving thousands of pages of relevant documents due to the complexity of the matter—are demanding a complete explanation from a single client, then the standards have been turned on their head.
You cannot dismiss something as fictional within an organization simply because the customer does not understand it.
Please determine the existence of services based on objective evidence.
Whether the consulting actually existed can be verified by checking the following documents.
- Record of document shipment
- Lending and return records of dedicated terminals
- Email, LINE, Telegram, Call History
- Original explanatory materials and creation history
- Impact on customer decision-making
- Record of a business proposal actually being adopted
- Past sales prices and similar cases
- Invoicing, payment receipt, revenue recognition, tax filing
- Testimonies from Those Involved
If you determine that there was no service rendered after examining these, you can provide the grounds for that decision.
Just those three points—that the person doesn't remember, doesn't have the documents, and has a low frequency of interviews—are not enough.
Public Questions for the Yokohama District Public Prosecutors Office and the Tokyo Regional Taxation Bureau
- Have you checked the shipping record of the consulting materials sent to Mr. Shigenori Kanemoto?
- Have you checked the records for the lending and return of the dedicated devices?
- Did you check the original or duplicate of the recovered materials?
- Have you checked the emails, LINE messages, Telegram messages, and call logs from the perspective of the provision of services?
- In addition to the number of interviews, what criteria were used to evaluate the value of the services?
- Have you checked the past sales prices, number of students, and compensation for similar projects?
- Have you checked the past high-value consulting track record for listed company executives and others?
- Did you consider the nature of the retainer agreement, where fees are incurred even in months when there are no consultations?
- Have you considered the business practice of collecting documents to ensure confidentiality?
- Did you specifically ask the service provider about the details, pricing structure, and past track record?
- What was the reason for determining the non-existence of services without confirmation from the person concerned when no question was asked?
- Are you using the sole fact that Mr. Shigenori Kanemoto cannot explain it at a later date as the basis for the non-existence of services?
Do not tax the memory of the customer.
The prosecutors' union is not claiming that any payment will qualify as an expense as long as it is under the guise of expensive consulting.
If it is fictitious, please provide proof that it is fictitious.
If the amount is excessive, please compare the market price with the value provided.
If there is no data, please check shipping, collection, and electronic recording.
Do not turn what the customer does not remember into a reason for a national institution to avoid investigating.
