Kobayashi Pharma Crisis: Leaders Step Down Following Explosive Supplement Scandal
Kobayashi Pharmaceutical's leadership steps down amid red yeast rice supplement health risks and deaths.
Breaking News
Jul 23, 2024
Mrudula Kulkarni

Nikkei has reported that Kobayashi Pharmaceutical's chairman
and president will step down in response to delays in disclosing information
and potential links between the company’s red yeast rice supplement and several
health issues, including deaths. Chairman Kazumasa Kobayashi and President
Akihiro Kobayashi, who are both part of the founding family, will be resigning.
Satoshi Yamane, the Senior Executive Director, is anticipated to take over as
president.
The red yeast rice supplement is under scrutiny for its
possible connection to over 80 deaths, some of which are still being
investigated. The board of directors is set to finalize these changes at their
meeting on Tuesday. While Akihiro Kobayashi will relinquish his role as the
company's representative, he will stay on as a director to address compensation
claims related to the health risks associated with the supplement.
An independent legal team has been examining the events
leading up to the initial disclosure of health issues and is set to release its
findings on Tuesday. Their report is expected to critique the delay in
Kobayashi Pharmaceutical's response, noting that it took over two months—from
the first health case reported in mid-January to the company’s announcement on
March 22. Additionally, the report will highlight that external directors were
only informed right before the announcement. The legal team may also argue that
the company hesitated to issue an early warning or recall the product.
In reaction to a separate evaluation revealing problems with
the company's governance, the four external directors determined that a revamp
of the management structure, including changes at the top, was necessary. The
founding family of the company agreed to this overhaul. On March 29, the
Japanese health ministry reported the presence of puberulic acid, a harmful
substance from blue mold, in some batches of red yeast rice ingredients. Blue
mold was also found in the culture room and air conditioning system at the
Osaka facility where the ingredients were produced. The ministry is further
investigating the potential toxicity of two other chemicals found in the
product.