Photo/Illutration Koki Tanabe, president of Kappa Create Co., operator of the Kappa Sushi revolving sushi chain (Asahi Shimbun file photo)

The president of a revolving sushi chain company was arrested on Sept. 30 over allegations he stole corporate secrets from his former employer, now a rival in the business.

Tokyo’s Metropolitan Police Department arrested Koki Tanabe, 46, president of Kappa Create Co., which operates the Kappa Sushi chain, on suspicion of violating the Unfair Competition Prevention Law.

Before becoming an adviser to Kappa Create in November 2020, Tanabe worked at Zensho Holdings Co., which operates the Hama-sushi chain of revolving sushi restaurants.

Tanabe was also an executive at Hama-sushi for three years from 2014.

According to investigative sources, Tanabe is suspected of copying trade secrets of Hama-sushi, such as the price at which the company bought its seafood, to a memory drive around October 2020 when he still worked for Zensho Holdings.

In June 2021, the MPD searched the offices of Kappa Create over suspicions Tanabe obtained monthly sales figures from a former colleague at Hama-sushi between November and December 2020, after he began working at Kappa Create.

The sources said police were continuing their investigation into that suspicion.

Tanabe was voted into another term as company president at Kappa Create’s shareholders’ meeting in June this year.

Sources said he apologized to those gathered at the meeting and would decide on whether to resign depending on the outcome of the police investigation.

In April, Tanabe told The Asahi Shimbun that he did obtain data from Hama-sushi, but he stressed that knowing the sales figure for a rival firm would do nothing to help him improve Kappa Create’s fortunes.

He declined to comment on whether he knew that his actions were possibly illegal.

Kappa Create issued a statement on Sept. 30 apologizing for the trouble caused, adding it was still trying to confirm all the facts.

KAPPA SUSHI NO. 4

The revolving sushi chain sector is effectively controlled by four major companies: Akindo Sushiro Co.; Kura Sushi Inc.; Hama-sushi; and Kappa Create.

According to research company NPD Japan, the four companies accounted for 80 percent of the market in 2021, up from 68 percent in 2014.

But Akindo Sushiro is by far the largest revolving sushi chain. Food and Life Companies Ltd., which operates the Sushiro chain, had sales of 240.8 billion yen ($1.7 billion) in the fiscal year ending in September 2021.

Kappa Sushi is stuck in fourth place, with sales of 67.2 billion yen, or one-fourth that of Sushiro, in the fiscal year ending in March 2022.

Tanabe was likely recruited by Kappa Create to improve its corporate performance since its sales are about half that of Hama-sushi as well.

(This article was written by Ryo Oyama and Shoko Mifune.)

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