[Last-Mile Labor Union] Hiroshi Mako, Representative Director and President of LG Asset Co., Ltd., and the "Makoto Watanabe Secretariat"

Private execution squad revealed through document referral to prosecutors

In a previous article, the Last One Mile Labor Union summarized the fact that Makoto Watanabe, Representative Director, Chairman, and CEO of Last One Mile Inc., was sent to the prosecutors on suspicion of violating the Financial Instruments and Exchange Act, along with the overseas stock structured bond management that lay at the center of the incident.

The prosecutor union of "Okami's Union," which is another medium,Makoto Watanabe, Hiroshi Mako, and LG Asset were sent to the prosecutors for violations of the Financial Instruments and Exchange Act just before the statute of limitations expired, but...I am publishing an article titled

According to confirmation by the prosecutors' union, the three prosecution case numbers assigned to this case correspond to the three parties: Makoto Watanabe, Hiroshi Mako, and LG Asset Co., Ltd.

In other words, this case is not just Mr. Watanabe's personal financial instrument transaction.

Hiroshi Mako, who served as the head of the secretariat for Makoto Watanabe, the representative director of Last One Mile Co., Ltd., and LG Asset Co., Ltd., a company where Mako serves as representative director, were also each referred to the Fukuoka District Public Prosecutors Office as separate case subjects.

Therefore, this time, focusing on Hiroshi Mako, who tended to be overshadowed by Mr. Watanabe, and LG Asset Co., Ltd., we will unravel the chain of command in this case.

Then what comes into view is not the secretarial office of a typical listed company representative.

It is a private organization formed for Mr. Watanabe's personal benefit, consisting of a chief of staff who manages financial products, a private secretary who supports Mr. Watanabe's personal life using company payroll, and beyond them, an operative unit that acts with the backing of ties to anti-social forces.

The parties involved: Hiroshi Mako and LG Asset Co., Ltd. as indicated by three case numbers

The case numbers assigned to this case by the Fukuoka District Public Prosecutors Office are the following three:

• R08-002699
• R08-002700
• R08-002701

These three cases are alleged Financial Instruments and Exchange Act violation cases corresponding to the three parties: Makoto Watanabe, Hiroshi Mako, and LG Asset Co., Ltd.

Fukuoka Chuo Police Station did not simply send papers on Mr. Watanabe alone as the instigator. It also organized investment operations and participant handling by Ms. Mako, as well as the registration and use of the credit of the corporation LG Asset Co., Ltd., as separate criminal cases.

• Makoto Watanabe is the person who led the structuring, solicitation, investment policy, and fund collection of structured bonds.
• Hiroshi Mako is the person who, under Watanabe's direction, handled communications with investment participants and managed operational duties.
• LG Asset Co., Ltd. is a corporation that gave participants the belief that it is a company capable of legally handling financial instruments.

The Fukuoka District Public Prosecutors Office subsequently dropped the charges in the three cases due to insufficient evidence.

However, insufficient evidence does not mean a determination that Ms. Mako and LG Asset were unrelated to the case. It is a disposition reflecting that the Fukuoka District Public Prosecutors Office was unable to gather sufficient evidence necessary for prosecution.

The incompetence of the Fukuoka District Public Prosecutors Office and its decision not to prosecute are pursued in detail in an article by the Prosecutors Union. The focus of this article is the division of roles that led the police to organize the three individuals as parties to the incident.

Makoto Watanabe, Hiroshi Mako, and LG Asset were sent to the prosecutors for violations of the Financial Instruments and Exchange Act just before the statute of limitations expired, but...

Hiroshi Mako is not just a secretary: He has two faces as the Head of the Secretarial Office and the President of LG Assets

Hiroshi Mako was introduced to the investment participants in this case as the head of the secretariat overseeing Makoto Watanabe's secretariat, and as a former Mizuho Securities financial practitioner.

Furthermore, he is also the Representative Director of LG Asset Co., Ltd.

Official company profile of LG Asset Co., Ltd.also contains the following content.

• The Representative Director is Mr. Hiroshi Mako.
• Established on February 18, 2021.
• Capital stock is 5 million yen.
• The business lines include financial instruments intermediary services, financial consulting, asset succession, inheritance planning, and M&A intermediary services.
• Registration number: Director-General of the Fukuoka Local Finance Bureau (Kin-Chu) No. 123.
• The affiliated financial instruments business operators are Akatsuki Securities, Co., Ltd. and Tokai Tokyo Securities Co., Ltd.

Representative message of LG AssetThen, it explains that under the banner of "long-term trust relationships with clients," they have been involved in asset management for affluent individuals and company owners at a securities firm since 2008.

If you only list my public titles, I am the head of the secretary's office for the representative director of a listed company, have experience at a securities company, and am a financial practice expert who manages a financial instruments intermediary business.

However, what Mako was doing in this case was not normal secretarial work.

In a Telegram group of about a dozen affluent individuals, I was responsible for the operational management of structured bonds combining foreign equities and handling participant support under Mr. Watanabe's direction.

Before I knew it, a secretary who was supposed to manage the schedule was managing other people's financial products worth 100 million yen.

The title of Chief of the Secretariat, the title of Representative Director of LG Asset, and a background of formerly working at a securities firm. These three layers of credibility overlapped to play a role in giving legitimacy to the financial products led by Mr. Watanabe.

Structured bond management that had begun prior to the registration of LG Asset Co., Ltd.

To understand this matter, the chronology is the easiest to follow.

• On February 18, 2021, LG Asset Co., Ltd. was established.
• In March 2021, Mr. Watanabe solicited investments in structured bonds and received 10 million yen and a 1.5 million yen deposit from at least one person.
• Since the spring of 2021, Mr. Watanabe has led the operations in a Telegram group, with Mr. Hiroshi Mako in charge of practical execution.
• On December 24, 2021, LG Asset Co., Ltd. registered as a financial instruments intermediary service provider.

Financial Services Agency Registered Financial Instruments Intermediaries ListHowever, the registration date of LG Asset Co., Ltd. is clearly stated as December 24, 2021.

Meanwhile, the solicitation, receipt, and management of funds had already begun by March of the same year.

Later-acquired registration does not have retroactive effect on prior acts.

Article 29 of the Financial Instruments and Exchange Act: No person may engage in a financial instruments business unless registered by the Prime Minister.

In this case, Mr. Watanabe led the investment content, Ms. Mako handled participant relations and operational administration, and the credibility of LG Asset Co., Ltd. as a financial business operator was presented to the participants.

The fact that the company was already established is different from having already obtained the registration required for financial instruments business.

If the registration obtained in December 2021 retroactively erases the unregistered period back to March of the same year, then the registration date by the Financial Services Agency is merely for show.

LG Asset itself explicitly states that it "does not hold money from customers"

The current official website of LG Asset Co., Ltd. contains even more important information.

We do not accept deposits of money or securities from customers.

Disclosure of LG Asset as a financial instruments intermediary service providerThus, it is clearly explained that the company does not hold agency authority for affiliated securities companies and does not custody money or securities from customers.

However, in this case, 10 million yen in investments in structured bonds and 1.5 million yen in deposits from multiple individuals and multiple accounts were transferred not to the affiliated securities company's customer account, but to Makoto Watanabe's personal bank account.

At this point, only two explanations remain for Ms. Mako and LG Assets.

• If this case involved LG Asset's financial instruments intermediary business, why did customer funds go into Mr. Watanabe's personal account instead of the affiliated securities company?
• If this matter was not part of LG Asset's business, why were LG Asset's name, registration, and the financial background of its representative, Mr. Mako, used to build credibility with the participants?

No matter which one you choose, accountability does not disappear.

If it is LG Asset's business, the issues are pre-registration solicitation, the channel for receiving customer funds, and the relationship with the affiliated securities company. If it is not LG Asset's business, the issue is the reason why the registered company's sign was lent to Mr. Watanabe's personal financial products.

It is easy to write "long-term relationships of trust" on an official website.

What is really needed is a transaction-by-transaction explanation of when and where the money received from participants went, which products it was invested in, in whose name it was held, and who ultimately profited.

The command and control hierarchy of the Makoto Watanabe Secretariat, headed by Hiroshi Mako

The issue concerning Mr. Hiroshi Mako cannot be allowed to end with just the structured bond incident.

Mako was the head of the secretariat at Last One Mile Co., Ltd. In other words, she was in a position to manage and supervise other secretaries working under Watanabe.

Based on what our union understands, the command and control structure of the secretary's office and its surrounding areas can be organized into the following structure.

• Makoto Watanabe is the Chairman and CEO of Last One Mile Inc., holding the highest authority to issue direct instructions to the secretariat.
• Hiroshi Mako oversees the secretariat department as the head of the secretariat, while also serving as the representative director of LG Asset Co., Ltd., executing financial product investments for Mr. Watanabe.
• Another private secretary working under Mako is a person whose salary payer was changed from Watanabe's affiliated company to Last One Mile Inc. immediately after Watanabe became the representative director, while the job duties remained unchanged.
• That private secretary is a person who hardly does any work related to Last One Mile Co., Ltd.'s business, and continuously takes care of Mr. Watanabe's schedule, dinner parties, transportation, personal communications, and other personal matters.
• The spouse of that private secretary has a long prison record for fraud and currently maintains close ties with antisocial forces, operating as Mr. Watanabe's covert enforcer.
• Regarding the private secretary's spouse, Last One Mile Co., Ltd. is the actual employer, and this person is engaged in activities funded by company money.

The issue is not the marital status of the private secretary itself.

Mr. Watanabe, knowing about his spouse's criminal record for fraud and ties to antisocial forces, is using company funds to employ them as an operative for his private negotiations, intimidation, information gathering, and other activities.

And Mr. Mako is the boss of that private secretary.

The head of the secretariat, acting on instructions from Mr. Watanabe, moves financial assets, subordinates support Mr. Watanabe's private life using company salaries, and his spouse operates as a covert action team backed by company funds.

This is not a regular secretary office organizational chart.

It is an operational organization exclusively for Makoto Watanabe that integrates finance, private life, foreign affairs, and ties with anti-social forces under a single chain of command.

Were Makoto Watanabe's personal needs supported by company payroll?

If Last One Mile Inc. pays the salary for the private secretary, the work to be performed in return should be the business of Last One Mile Inc.

This salary is not intended to be used for Mr. Watanabe's personal private life, private dinners, personal investments, external disputes, or handling matters for family and acquaintances.

If only the source of the salary payment was changed from Mr. Watanabe's affiliated company to Last One Mile Inc., while the actual duties remained unchanged and she was made to continue looking after Mr. Watanabe's personal needs, then the company's labor costs were converted into Mr. Watanabe's personal economic benefit.

The same problem applies to the funds that went to the private secretary's spouse.

If an individual who is neither an employee of the company nor a legitimate external contractor was mobilized as Mr. Watanabe's personal action squad, and Last One Mile Co., Ltd. covered their remuneration, vehicle expenses, accommodation expenses, food and beverage expenses, communication expenses, and others, it cannot be called an expense for the company.

Article 355 of the Companies Act: Directors shall comply with laws and regulations, the articles of incorporation, and resolutions of shareholders meetings, and shall faithfully perform their duties for the stock company.

The duty to faithfully perform one's duties for the corporation and using company funds for the personal friendships and private life of the Representative Director are incompatible.

Article 960, Paragraph 1 of the Companies Act: When any of the following persons, for the purpose of promoting their own or a third party's interest or inflicting damage on a stock company, acts in breach of their duties and inflicts financial damage on the stock company, they shall be punished by imprisonment with work for not more than 10 years or a fine of not more than 10 million yen, or both.

Item 3 of the same paragraph includes directors.

If company salary, outsourcing fees, expense reimbursements, or other titles were used to cause damage to the company for the purpose of benefiting Mr. Watanabe or a third party, the issue of the crime of special breach of trust will arise.

Article 253 of the Penal Code: A person who embezzles another person's property that he or she possesses in the pursuit of business shall be punished by imprisonment for not more than ten years.

Depending on the specific cash management, approval authority, payment methods, and ultimate beneficiaries, the crime of embezzlement in the course of business may also be considered.

It is not a system where calling it a salary makes it safe, calling it secretarial expenses makes it safe, or getting the chairman's approval makes it safe. What is questioned is actually whose work was done, who received the benefits, and what kind of value was provided to the company.

Hiroshi Mako's managerial responsibility does not disappear with "I didn't know"

Hiroshi Mako is the person who carried out the administrative work under the direction of Mr. Watanabe in the Financial Instruments and Exchange Act violation case, and at the same time served as the head of the secretariat for Last Mile Inc.

Therefore, Mr. Mako has accountability from two directions.

• Regarding the structured bonds led by Mr. Watanabe, what did you know as the representative of LG Assets, what were you instructed to do, and what did you execute?
• As the head of the secretariat, how did you manage the duties, salaries, working conditions, and tasks performed by the spouse of your subordinate, a private secretary?

If Ms. Mako knew about the activities of her private secretary and their spouse and directed or approved them, it would constitute direct involvement in the private use of company funds and personnel through the secretariat.

Conversely, if she was the head of the secretariat yet unaware that her subordinates were not performing duties for Last One Mile Inc. but instead attending to Mr. Watanabe's personal needs, and that his spouse was operating as a covert operative using company funds, it would mean that the management of the secretariat itself did not exist at all.

If you knew, you were involved; if you didn't know, it was a failure of supervision.

The title of Head of the Secretary's Office is not a convenient, transparent position that exists only when giving orders to subordinates and vanishes the moment a problem comes to light.

Furthermore, if Mr. Mako performed work for LG Asset Co., Ltd. while using Last One Mile Co., Ltd.'s working hours, personnel, devices, office space, transportation expenses, or other company resources, it is also necessary to sort out the approval for concurrent employment, conflicts of interest, working hours, and the burden of expenses.

How were the time spent working as the General Manager of the President's Secretariat at Last One Mile Inc. and the time spent working as the Representative Director of LG Asset Co., Ltd. separated?

Which company was paying the salary while responding to Mr. Watanabe's investment instructions?

Unless the relationship between these two companies and the single de facto director is explained, Mr./Ms. Mako's title looks like a double door designed to blur the boundaries between the companies.

Outwardly a "secretarial service," and inwardly a hit squad exclusively for Makoto Watanabe?

Last Mile Inc. official websiteoffers "secretarial agency services" as one of its corporate services.

Any company that provides secretarial services to external clients should also clearly manage its own secretarial department in terms of job responsibilities, the chain of command, actual working conditions, and cost allocation.

However, in the secretary's office of Mr. Watanabe, as understood by our union, the boundaries between company business and the representative's personal business have disappeared.

• The head of the secretariat will handle the operational duties for Mr. Watanabe's personal financial instrument transactions.
• A private secretary attends to Mr. Watanabe's personal needs while receiving a company salary.
• The spouse of Mr. Watanabe’s private secretary—who has a history of fraud and ties to antisocial forces—acts as Mr. Watanabe’s operative.
• Last Mile Inc. will substantially bear those personnel and activity expenses.
• Even if the issue becomes a criminal case, the company does not explain it to employees, shareholders, or business partners.

Externally a secretarial agency service, internally the chairman's exclusive personal agency and hit squad.

This means that the most comprehensive secretarial service provided by Last One Mile Inc. is not for its customers, but is being provided exclusively to Mr. Watanabe.

In addition, the company,Basic Policy on Severing Relations with Anti-Social ForcesAnd we declare that we will not engage in any transactions or provide funds to antisocial forces.

On the other hand, if company funds were used to deploy individuals with ties to anti-social forces as an action squad via the Representative Director's secretariat, then the official policy and the actual management were polar opposites.

Simply posting a commendable policy on the official website will not sever ties with antisocial forces.

If the person who should be blocked was integrated into the secretary's office's command and control structure, the first thing that should be severed is not the text on the website, but the funding and instruction channels.

Open questions to Mr. Hiroshi Mako, Mr. Makoto Watanabe, LG Asset, and Last One Mile

Questions for Mr. Hiroshi Mako

1. Please clarify the period when Hiroshi Mako served as the chief of staff for Makoto Watanabe.
2. As the head of the secretariat, whom did you manage as subordinates, and what duties did you assign to each of them?
3. Were you aware of the fact that Makoto Watanabe's private secretary was receiving a salary from Last One Mile Co., Ltd. while attending to Mr. Watanabe's personal needs rather than working on the company's business?
4. Were you confirming the duties, attendance, deliverables, and expenses of the private secretary in your capacity as the Head of the Secretary's Office?
5. Were you aware that the spouse of the private secretary in question was acting as part of Mr. Watanabe’s operational team?
6. Were you aware of the fact that salaries, remuneration, expenses, or other funds were paid to the same person from Last One Mile Inc. or its affiliated companies?
7. Regarding overseas equity-linked structured bonds, what instructions did you receive from Mr. Watanabe, and what did you specifically execute?
8. Did you know that as of March 2021, when this structured bond was initiated, LG Asset Co., Ltd. was not registered as a financial instruments intermediary?
9. Did you explain to the investment participants that LG Asset is a company legally authorized to handle financial products?
10. Were you aware that the participants' 10 million yen and the 1.5 million yen deposit were transferred to Mr. Watanabe's personal account?
11. Please clarify the product name, issuer, contract name, purchasing institution, and custody account of the structured bond you actually purchased.
12. Did you use Last Mile Inc.'s working hours, devices, office, and expenses for LG Assets' or Mr. Watanabe's personal investment operations?
13. Did you receive formal approval from the Board of Directors or the responsible department of Last One Mile Inc. regarding your concurrent position as Representative Director of LG Assets?
14. Have you reported the fact of the document referral to the Board of Directors, the Audit and Supervisory Committee, and the Internal Audit Department of Last One Mile Inc.?

Questions for Mr. Makoto Watanabe and LG Asset Co., Ltd.

1. Did Makoto Watanabe appoint Hiroshi Mako as the Representative Director of LG Asset Co., Ltd.?
2. Did Mr. Watanabe involve himself in the establishment funds, operating funds, business plan, and selection of business partners for LG Asset Co., Ltd.?
3. Did Ms. Mako or Mr. Watanabe hold the actual decision-making power at LG Asset Co., Ltd.?
4. Was this structured bond issued as part of LG Asset Co., Ltd.’s business operations?
5. If it was an LG Asset business, what was the reason for having customer funds transferred to Mr. Watanabe's personal account?
6. If it was not an LG asset business, why were the company's name, registration, and Ms. Mako's financial background used in the explanation to participants?
7. Did you report to the Fukuoka Local Finance Bureau, Akatsuki Securities, and Tokai Tokyo Securities regarding the solicitation, receipt of funds, and management that took place before the registration on December 24, 2021?
8. How do you explain the fact that the funds in this case were deposited into Mr. Watanabe's personal account, while the official website of LG Assets explicitly states that it does not hold customer funds?
9. Whose books and which account titles were used to process the dividends, principal, and security deposits paid to investment participants?
10. What was the reason for instructing at the time of the return, to the effect of "Do not call it the return of investment funds" and "Treat it as repayment of a loan"?
11. How does the Conflict of Management Officer of LG Asset evaluate the relationship between this matter and Mr. Watanabe?
12. Are you retaining all records related to this matter, including transactions, communications, customer interactions, fund transfers, and accounting entries?

Questions for the Board of Directors and Audit and Supervisory Committee of Last Mile Works Co., Ltd.

1. When did you become aware of the fact that Mr. Hiroshi Mako served as the Head of the Secretariat while simultaneously holding the position of Representative Director of LG Asset Co., Ltd.?
2. Who reviewed and approved Ms. Mako's side business, working hours, compensation, and conflict of interest?
3. Are you retaining employment contracts, job descriptions, time and attendance records, work reports, and deliverables for Mr./Ms. Mako and another private secretary?
4. Who approved the change in the payer of the private secretary’s salary from a company affiliated with Mr. Watanabe to Last One Mile, Inc.?
5. Please clarify the specific duties handled by the secretary in question for Last One Mile Inc. after the change of the payroll payer.
6. Did Last One Mile Co., Ltd. or any of its affiliated companies pay the secretary’s spouse any salary, contract fees, business expenses, vehicle expenses, lodging expenses, or other payments?
7. Were you aware of the chain of command involving Mr. Watanabe, Ms. Mako, their private secretaries, and their spouses?
8. When did you become aware that Mr. Watanabe, Ms. Mako, and LG Asset had been referred to the prosecutors in connection with the case involving violations of the Financial Instruments and Exchange Act?
9. Have you reported it to the Board of Directors, the Audit and Supervisory Committee, the Risk and Compliance Committee, and the accounting auditor after grasping it?
10. Did you conduct an independent investigation, separate from Mr. Watanabe and Ms. Mako, regarding the referral of documents to prosecutors and the use of company resources by the secretarial office?
11. How would you explain the consistency between the company’s policy of severing ties with antisocial forces and the fact that it used the spouse of a private secretary as an operative?
12. Have you considered the impact of this matter on internal controls, related-party transactions, financial benefits to officers, timely disclosure, and maintaining the company’s listing status?

Measures Sought by the Last Mile Labor Union

1. Last Mile Inc. shall initiate an investigation by independent external experts regarding Makoto Watanabe, Hiroshi Mako, LG Asset Co., Ltd., and the entire secretariat.
2. Mr. Watanabe and Ms. Mako should be excluded from the process of selecting the investigation contractor, gathering evidence, interviewing relevant parties, and approving the investigation results.
3. Review all employment contracts, job descriptions, attendance records, salaries, bonuses, expense reports, work reports, and deliverables for all staff members in the Secretary’s Office.
4. Preserve all internal and external emails, chats, phone calls, contracts, deposits and withdrawals, accounting records, and records of approval for secondary employment related to LG Asset Co., Ltd.
5. Investigate, on a transaction-by-transaction basis, the funds from structured bonds deposited into Mr. Watanabe’s personal account, including the depositors, recipients, investment destinations, dividends, repayments, and ultimate beneficiaries.
6. Conduct a comprehensive investigation into all company expenditures—including salaries, fees for contracted services, business expenses, vehicle expenses, meal expenses, lodging expenses, travel expenses, and other payments—made to the private secretary and his or her spouse.
7. If any expenses unrelated to company business are identified, demand that Mr. Watanabe and any other beneficiaries reimburse the full amount.
8. Report the factual background and the initiation of the investigation of this matter to the Fukuoka Local Finance Bureau, Akatsuki Securities Co., Ltd., and Tokai Tokyo Securities Co., Ltd.
9. Conduct an anti-social forces investigation by external experts to verify that no individuals with ties to anti-social forces are operating through the secretarial office, company funds, or affiliated companies.
10. Make this matter a formal agenda item for the Board of Directors and the Audit and Supervisory Committee, and explain the investigation results to employees, shareholders, business partners, and the market.
11. Prohibit the solicitation, intimidation, or unfair treatment of current employees, former employees, investors, and other parties with information regarding this matter.
12. Restructure the Secretary's Office so that it functions as a formal department of Last One Mile, Inc., rather than as Mr. Watanabe's personal private organization.

Makoto Watanabe's secretariat is truly Makoto Watanabe's member

What has come to light in this case, in which the case was referred to prosecutors, is not limited to the financial transactions of Makoto Watanabe alone.

While serving as the head of the secretarial office at Last One Mile Co., Ltd., Hiroshi Mako also served as the representative director of LG Asset Co., Ltd., where he was responsible for the day-to-day operations of the structured bonds led by Mr. Watanabe.

Those structured bonds were initiated before LG Asset was registered as a financial products broker, and the investment funds and guarantee deposits were deposited into Mr. Watanabe’s personal account rather than into the account of his affiliated securities firm.

Under Ms. Mako, there is another private secretary who receives a salary from Last One Mile Co., Ltd. but continues to handle Mr. Watanabe’s personal affairs rather than performing work for the company.

Furthermore, his spouse has a history of serving a long prison sentence for fraud and has ties to antisocial groups; with Last One Mile Co., Ltd. as her de facto employer, she serves as Mr. Watanabe’s behind-the-scenes operative.

At the top of this chain of command is Makoto Watanabe.

The company’s secretarial department exists to support the company’s management and operations. It is not a department intended to manage the personal investments of the CEO, manage his or her private life, or use company funds to support individuals responsible for intimidating external parties or carrying out coercive actions.

Hiroshi Mako, who handles financial operations; the private secretary who manages Mr. Watanabe’s personal affairs; and the covert operational team working behind the scenes. If all of them were prioritizing Mr. Watanabe’s personal interests and instructions over those of Last One Mile, Inc., then there is no point in calling the department the “Secretarial Office.”

It is a private organization within the company dedicated exclusively to Mr. Makoto Watanabe.

If the representative director who has been referred to prosecutors is referred to as a “Makoto Watanabe member,” then the secretarial office—which has provided comprehensive support for his financial products, personal life, external negotiations, and operational team—would also be appropriately described by the same term.

Makoto Watanabe's Secretariat is, in fact, part of the Makoto Watanabe team.