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Japan: Executives Responsible for Damage Caused by Concealing Use of Unauthorized Food Additive

(Apr. 2, 2008) Shareholders of a Japanese company recently sued the company's former president and directors, alleging that they caused damage to the company by concealing the use of an unauthorized food additive for pork buns and continuing to sell the inventory of buns containing the additive. The company was blackmailed by a person who found out that the bun ingredient containing the unauthorized food additive was used in one of the company's designated food factories in China and who demanded that the company sign a contract to make his own food factory one of the bun suppliers. When the media reported it, the company's sales declined significantly. The Osaka High Court found the former president and directors responsible and ordered two of them to pay approximately 5.3 billion yen (US$53 million) and the others to pay approximately 565 million yen (US$5.65 million).

The Supreme Court rejected the appeals from both sides on February 12, 2008. The unauthorized food additive is TBHQ (tertiary butylhydroquinone), which has been approved as a food preservative in the United States and other nations. The reason that TBHQ has not been approved in Japan is that no one has requested the approval, not because of health concerns. (Dasukin kyû keiei jin 13 nin ni 53 oku en no baishô meirei kakutei [5.3 billion yen damages owed by former executives affirmed], YOMIURI ONLINE, Feb. 12, 2008 (on file with author).)