Insurance fraud
In June 2022, a whistleblower reported to the three largest insurance firms in Japan – Sompo Japan, Mitsui Sumitomo, and Tokio Marine Nichido – that Big Motor was making fraudulent insurance claims.[24] At the request of the three insurance firms, in January 2023 Big Motor conducted an internal investigation, which concluded that the claims were mistakenly made. Although Sompo Japan accepted the findings and resumed business with Big Motor, Mitsui Sumitomo and Tokio Marine Nichido decided to conduct their own investigation with a panel of third-party lawyers and experts.[25]
On 18 July 2023, the panel released their findings, accusing Big Motor of "systematically damaging automobiles and unnecessarily replacing parts" during repair work at their dealerships, as part of a culture of widespread insurance fraud. The panel, which surveyed 382 Big Motor employees said that nearly 30% admitted to deliberately shoddy repair work, with a further 60% saying that their supervisors directly ordered them to do so.[26] The report alleged that Big Motor supervisors threatened repair shop employees with demotion unless they netted at least ¥140000 in profits for each vehicle serviced, motivating employees to damage cars to net higher insurance claims. Employees allegedly used screwdrivers and sandpaper to scratch cars — and hit cars with socks stuffed with golf balls. In total, the report found that out of 8,427 Big Motor insurance claims since November 2022, at least 1,275 or 15% of them were fraudulent, with the average excess amount being ¥39000.[24] Reports emerged that Big Motor employees also concluded numerous fictional insurance contracts.[27] After further investigation, the number of fraudulent claims was pegged at 65,000, or 30% of claims made over the past five to eight years.[28]
Big Motor's internal investigation was later found to have been substantially false, with the results of eight out of the twelve individual cases investigated doctored by order of Big Motor executives.[25]
Tree killing
Concurrent to the investigation into the insurance fraud, allegations emerged of Big Motor employees purposefully poisoning roadside trees and other vegetation with herbicide or simply cutting them down, with the Japanese police receiving over 50 damage reports to roadside trees.[29] In one case, 17 trees which covered up advertising for the local Big Motor outlet in Ōta, Gunma Prefecture, were found dead, with traces of herbicide detected in the soil.[21] In another case, 24 purple azaleas, valued at ¥308200, were uprooted in front of a Big Motor outlet in Hiratsuka, Kanagawa Prefecture.[30]
As a part of the investigation into the tree-killing, Big Motor headquarters and nine outlets were raided by Tokyo police in September 2023. Later, it emerged that Big Motor vice president and son of founder Hiroyuki Kaneshige, Koichi Kaneshige, personally led monthly "environmental inspections", which financially penalized employees for not cutting down trees as well as not maintaining "fanatical hygiene".[21] On 4 March 2024, 13 former Big Motor employees including former Vice President Koichi Kaneshige were indicted for property destruction related to the killing of the trees.
Other controversies
In 2016, it was reported that Big Motor financially penalized sales managers who did not meet an aggressive insurance sales target of ¥250000. When confronted about this, Big Motor acknowledged the report, but claimed that penalties were voluntary and not part of company policy.[31]
In July 2023, during the investigation into the insurance fraud scandal, it was revealed through leaked messages that President Hiroyuki Kaneshige and his son, Vice President Koichi Kaneshige, regularly berated employees, calling one an "idiot" and another a "piece of junk". In another exchange, Koichi Kaneshige, in a conversation ostensibly about sales, typed the word "death penalty" (死刑) eighteen times,[32] which was the subject of widespread ridicule by the Japanese public and was one of the winners of the Internet Buzzword Award.[33] In the aftermath of the scandals, Hiroyuki and Koichi Kaneshige attempted to delete most of these messages.[34]
Aftermath
On 18 July 2023, immediately after the publication of the report implicating Big Motor for systematic insurance fraud, Big Motor released a statement pledging to pay back the insurers and Transport Minister Tetsuo Saito announced an investigation into the company.[26] On 25 July, Big Motor founder and president Hiroyuki Kaneshige resigned in a press conference, claiming that he and top executives had no knowledge of the fraud but admitted that he had neglected to create healthy corporate governance.[24][35] On 17 August 2023, Big Motor's request to refinance ¥9 billion owed to leading Japanese banks was rejected in the wake of the scandal, throwing the finances of the company into turmoil.[36]
On 19 September 2023, Japan's financial regulator, the Financial Services Agency (FSA) raided Big Motor's offices in Tama, Tokyo.[37]
