(Bloomberg) — Takeshi Niinami, a corporate maverick who seldom missed a chance to poke at Japan’s business establishment, has resigned as Suntory Holdings Inc.’s chief executive officer after his home was searched for illegal drugs.
Police are investigating Niinami, 66, on suspected legal violation for purchasing a supplement, Suntory President Nobuhiro Torii said at a news conference in Tokyo on Tuesday, without providing further details.
Niinami denied the allegations, according to local media reports Tuesday, but declined to comment when reached by Bloomberg. The executive didn’t attend the news conference. The company said in a statement that exercising appropriate caution when purchasing supplements is an essential quality expected of a corporate leader and Niinami’s actions made him unfit for the job.
Niinami told Asahi newspaper that he resigned as a police investigation is a disgrace for a company involved in supplements. The paper also reported on Tuesday that Niinami said he bought the product in the US, believing it was a legal CBD supplement free of THC — the psychoactive chemical in cannabis responsible for its intoxicating effects — left it with a friend and had it sent to Japan.
Outspoken Voice
As the chair of the country’s second-biggest business lobby group, Japan Association of Corporate Executives, known as Keizai Doyukai, Niinami has been an outspoken and influential voice in business circles. For more than a decade, he has pushed to globalize Suntory as the Japanese beverage giant faces slower domestic consumption and heightened competition abroad. Niinami has no intention of stepping down as chair, signaling his plan to remain in the post, according to the Asahi report.
The fact that the chairman of Suntory — a company that also sells health supplements — went out of his way to obtain such products from overseas and subsequently became the subject of a police investigation raises concerns, said Yasutake Honma, an ESG analyst at Bloomberg Intelligence.
“It begs the question of why it was purchased,” Honma said. “These doubts could affect the company’s stock price and influence consumer behavior, ultimately damaging shareholder value.”
Listed unit Suntory Beverage & Food Ltd.’s shares gave up gains following reports of Niinami’s resignation, and closed 2.9% higher at 4,725 yen in Tokyo on Tuesday. The stock is down 5.8% this year.
Niinami’s frequent appearances in Japanese and international media made him a highly visible, and often controversial, presence in a business environment known for being slow to change and risk-averse.
In July, Niinami called for Japan’s central bank to raise interest rates, warning that failure to do so was keeping the yen weak, and in turn was fueling soaring prices for food and other imports.
“It will be the governor’s responsibility,” he said, an unusually blunt remark directed at Kazuo Ueda, the central bank governor who began to tighten rates last year after 17 years of ultra-loose monetary policy.
Under Japanese law, cannabidiol, or CBD products are legal in Japan as long as they are completely free of THC. Anything containing THC above an extremely low threshold are classified as narcotics, and possession or transfer of CBD products containing THC is punishable by as much as seven years in prison.
Japan’s drug laws have ensnared other corporate executives before.
Last October, Japanese medical devices maker Olympus Corp. Pushed out former CEO Stefan Kaufmann after investigating an allegation he purchased illegal drugs. The German native was later found guilty of receiving illegal drugs.
In 2015, Julie Hamp, then a Toyota Motor Corp. Media adviser, resigned after her arrest over import of pain medication into Japan without approval. However, she was let go after prosecutors didn’t bring any charges against her and Hamp rejoined the company in 2022.
Suntory hired Harvard-educated Niinami in 2014, making him the first executive outside the founding family. He helmed the company’s integration with Beam Inc., which it bought for $16 billion. In December, Suntory replaced Niinami by promoting Torii as president, in a move that saw the Japanese whiskey maker’s reins being handed back to the family. Niinami stayed as CEO and chairman.
Before joining Suntory, Niinami headed Japanese convenience store chain Lawson Inc. For 12 years.
The company will spend significant time and resources to support the investigation and to provide explanations to stakeholders, according to BI’s Honma. The extent of the impact on the company’s operations could vary depending on the findings of the ongoing probe, he added.
“I truly respected Mr. Niinami as a bold, decisive, and highly capable leader. He dramatically grew both revenue and profit — an undeniable achievement,” a teary-eyed Torii said at the briefing. “It’s truly regrettable that we couldn’t continue working side by side.”
