Leopalace21 Flaws Caused by Biz Expansion in Haste: Panel

Economy

Tokyo, May 29 (Jiji Press)--Leopalace21 Corp.'s <8848> hasty business expansion has resulted in defects in apartment buildings it built, a third-party investigative panel said in a final report Wednesday.

In the report announced by the firm, the panel said that the company "was quick to successively develop and deploy new models to recover and expand its business performance and neglected to verify" its compliance with laws and regulations, such as the building standards law, and the quality of the completed buildings.

In response to the report, the apartment rental firm's seven internal board members except for Managing Executive Officer Bunya Miyao will resign to take responsibility. Miyao is set to succeed outgoing President Eisei Miyama on Thursday.

The panel also brought up in the report the responsibility of corporate founder Yusuke Miyama, who was president of the company when the shoddy apartments were built.

One of the problems at Leoplace21 is that the company did not construct party walls to block fire and sound in attics. On this, the panel pointed out that the company included the walls in drawings as if it tended to build them to "deceive construction officials for construction certificates." Such irregularities were carried out "on a company-wide and systematic basis," it determined.

[Copyright The Jiji Press, Ltd.]

Jiji Press