Embezzlement Scandal at Japan's NHK Leads to Public Apology, Voluntary Exec Pay Cuts

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The $1.8 million fraud is the latest in a string of scandals to hit the public broadcaster and follows the firing of news anchor Kenichi Tsukamoto last week for making the drug "poppers" in his apartment.

The entire 12-member executive board, including its president, of Japan's public broadcaster NHK will give up a portion of their salary for two months over a $1.8 million (?200 million) embezzlement at a group company of the organization.  

The latest in a string of scandals to hit the broadcaster will see president Katsuto Momii take a 50 percent cut for two months, five executives, including its compliance officer, give up 30 percent, and a further six return 10 percent of their compensation.

"There was a problem with our internal controls and we will take responsibility,” said Momii said in a public statement of apology.

An NHK spokesperson told The Hollywood Reporter that senior executives' salary figures aren't disclosed. Pay cuts are a traditional way for executives at Japanese company to atone for mistakes or poor performance. Presidents and senior executives at Sony and Nintendo have previously given up portions of their salary and bonuses after poor financial results.

NHK is funded by the public paying viewing fees of approximately $120 annually for its terrestrial channel and more for satellite offerings. The public broadcaster had faced growing non-payment rates in the past following scandals but has outsourced collection in recent years and raised the percentage of the population paying the monthly fees.

The embezzlement involved at least two employees at NHK Integrated Technology Inc. claiming at least $1.8 million for fictitious orders and business trips. The employees have been fired, but no criminal charges have been announced.  

News of the scandal broke earlier this year and was followed by an investigation into a reporter at the public broadcaster from the Saitama station, north of Tokyo, for misusing $9,000 (?1 million) in taxi expenses for personal use.

Last week, NHK fired news anchor Kenichi Tsukamoto for producing illegal drugs in his apartment. Tsukamoto was arrested in January and charged with production of "dangerous drugs" — a catch-all term used in Japan for substances including synthetic cannabis. Tsukamoto was reportedly making amyl nitrate, a drug known as "poppers" and associated with male gay sex.

Next month the popular presenter of the "Close-up Gendai" current affairs show Hiroko Kuniya will be replaced, with media and political analysts pointing to behind-the-scenes pressure from the government. Kuniya reportedly upset a senior government figure live on the show late last year with unusually tough — by sedate Japanese media standards — unscripted questions.