Citizen Watch Ex-Manager Arrested for Stealing 420 Watches, May 28

Police arrested Kinya Honma, 57, a former overseas brand sales director at Citizen Watch, on May 27 for embezzling approximately 420 watches valued at 96 million yen. Between 2019 and 2024, Honma used his access to the inventory management system to remove watches from storage and sold them to secondhand dealers over 40 transactions, netting more than 30 million yen. The case reveals serious gaps in internal controls at one of Japan’s largest watchmakers.

How the Theft Unfolded

Honma held a position in sales promotion that gave him authority to request inventory watches for display purposes. He exploited this access and the company’s inventory management system to remove watches repeatedly between December 2019 and April 2024. The initial charge covers eight watches valued at 220,000 yen stolen between December 2019 and February 2020, which he sold to Tokyo secondhand dealers for 78,000 yen.

Investigators believe the total theft involved approximately 420 watches worth 96 million yen in retail value. Honma sold them across more than 40 separate transactions to buy-back shops. He stated “I wanted money” when questioned by police.

Discovery and Disappearance

In September 2024, Honma told his supervisor he could not come to work and disappeared. The following month, Citizen’s internal audit uncovered the missing inventory. The company fired him in October 2024 and filed a police report in December. Investigators found him working at a traditional inn in Atami, Shizuoka Prefecture in spring 2025, leading to his arrest on May 27, 2026.

Police believe Honma spent the stolen money on hotel stays and golf outings with an acquaintance. The embezzlement went undetected for five years despite repeated thefts.

Internal Control Failures Exposed

The case highlights systemic weaknesses in Citizen’s oversight. A manager with legitimate access to inventory systems used that authority to steal high-value products. The company’s controls failed to flag 40 separate removals of expensive watches over five years. Under Japanese law, embezzlement carries a maximum sentence of 10 years imprisonment.

Citizen said it has strengthened internal management procedures and increased compliance training. The company stated: “We sincerely apologize to all stakeholders and are committed to preventing recurrence and restoring trust.”

What This Means for Investor Oversight

The embezzlement exposes a gap between corporate governance statements and actual execution. Investigators found the scheme operated undetected for five years, suggesting inventory audits and access controls were inadequate. Investors should scrutinize whether manufacturers with high-value inventory have independent audit verification and segregation of duties between approval and execution of inventory transactions.

Final Thoughts

A five-year embezzlement scheme at Citizen Watch reveals weak internal controls over high-value inventory. The company’s delayed detection and the manager’s ability to exploit his position raise questions about governance practices across Japanese manufacturers with similar inventory structures.

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