The president of PEZY Computing, a venture company developing supercomputers, and another man were arrested on Dec. 5 on suspicion of illicitly receiving approximately 431 million yen in subsidies from a government-affiliated organization, prosecutors said.
Motoaki Saito, 49, president of the Tokyo-based firm, and Daisuke Suzuki, 47, former project development manager, stand accused of fraud.
The Tokyo District Public Prosecutors Office's special investigation unit searched PEZY's headquarters in the capital's Chiyoda Ward to gather evidence.
Prosecutors have not disclosed whether the suspects have admitted to the allegations against them.
In February 2014, Saito and Suzuki allegedly teamed up to submit a document falsely stating that the company spent approximately 773 million yen on a subsidized project to the New Energy and Industrial Technology Development Organization (NEDO) and swindled it out of some 431 million yen in subsidies the following month, prosecutors allege.
Gyoukou, a supercomputer developed jointly by PEZY and other entities, was placed fourth in terms of computing speed in the latest ranking released last month by TOP 500, a project by experts to compare the performances of supercomputers all over the world.
A Gyoukou computer was placed at the Yokohama laboratory of the Japan Agency for Marine-Earth Science and Technology (JAMSTEC) in May this year. It can perform about 19,000 trillion calculations per second.
According to its website and other sources, PEZY Computing was founded in January 2010 and is capitalized at approximately 940 million yen. The company develops and sells software.
The history section of the firm's website states that the company's proposals were adopted for NEDO's two projects -- one in July 2010 and the other in July 2012.
NEDO admitted having extended subsidies to PEZY Computing. "It's true that we extended subsidies to the firm. We'd like to respond to the case after confirming the facts," a NEDO official said.
A JAMSTEC official said the agency is taking a wait-and-see attitude toward the incident.