Masami Ochiai, former president and CEO of Atlus parent company Index Corporation, has been arrested by Japanese authorities who claim Ochiai fraudulently boosted Index's financial records prior to its sale to Sega Sammy Holdings last year.

News of the arrest comes from Japanese business periodical Nikkei (via a Gematsu translation), which claims that the 4 billion yen profit shown on Index's records of the third fiscal quarter of 2012 doesn't actually exist. Investigators believe Ochiai fraudulently reported business transactions that never occurred in order to avoid the removal of Index from JASDAQ (the Japanese analogue to the American NASDAQ stock exchange). Unfortunately for Index, even that profit (the first Index had shown in six years), couldn't save the company from bankruptcy, and it was while sorting out that mess that authorities picked up on Ochiai's reported attempts to make his company look a few million yen better than it otherwise would have.

Though Ochiai claims that he has "not been engaging in fraud," investigators plan to delve deeply into Index's financial records under the belief that Ochiai wasn't alone in his deception, and that these financial hijinks were systematically plotted out by Index management.
[Image: Sega]

This article was originally published on Joystiq.