Japan scandal widens

Anita Roddick's Body Shop, which prides itself on its ethical standards, has been unwittingly dragged into Japan's corporate racketeering scandal.

Kenji Tanaka, ex-president of Jusco, the Japanese supermarket giant that is Mrs Roddick's head local franchisee, was arrested on Tuesday on suspicion of being linked to an alleged corporate racketeer. The next day, Tokyo prosecutors raided Jusco's headquarters in Chiba near the Japanese capital.

Mr Tanaka was swiftly replaced as president by Motoya Okada, whose family control the huge retailing group. A Jusco subsidiary, Aeon Forest, runs the 87 Body Shop franchises in Japan.

Mr Tanaka was arrested following allegations that pre-date his arrival at Jusco two years ago. He previously worked at Dai Ichi Kangyo Bank, and he is suspected of having approved illegal loans that were made to the reputed racketeer.

Dai Ichi has replaced its entire top management following the allegations.

A Body Shop spokesman said the company was not concerned at the arrest of Mr Tanaka. "The allegations concern an individual when he was in a previous job," he said.

Jusco also owns 15 per cent of Laura Ashley and has representatives on the board. Sir Bernard Ashley controls 35 per cent, so the two in effect control the publicly quoted company.

"It doesn't bother us at all," said Stephen Cox, Laura Ashley's company secretary. "It's nothing to do with Jusco."