Discount travel seller Tellmeclub which filed for bankruptcy this week, had misrepresented the scale of its financial problems for several years.
According to bankruptcy court documents the travel agency lost ¥1.5 billion ($13.5 million) in its last recorded financial year of accounts but actually reported an operating profit.
It had been misrepresenting accounts since 2014, Kyodo News reports.
The closure of the Tokyo-based travel agency is the fourth-largest bankruptcy in Japan’s tourism industry, data from credit research agency Tokyo Shoko Research says.
According to lawyers, it owes money to 36,000 customers for travel tickets that were not booked totaling more than ¥15 billion.
It is thought only about one percent of these customers will be compensated through an insurance scheme by the Japan Association of Travel Agents.
The company’s problems started in late 2014 when it began to under report costs and expenses in order to stay afloat, it is alleged.
Tellmeclub also owes a large sum of money to global airline association International Air Transport Association.
The company had a workforce of about 80 staff when it announced its closure this week.
