Demon Slayer Studio Founder Sheds New Light on Their Tax Crimes, Motivation

To say Demon Slayer is a hit would put its success in the lightest of terms. Since day one, the anime has been a huge hit, and Tanjiro has become a mascot for the industry in just a few years. After breaking dozens of records with its show and film, Demon Slayer is looking to wow audiences with season two, but things hit a bump when the anime's studio ran into legal trouble last yet. Now, the former president of ufotable is addressing the situation, and it turns out not even a hit anime can solve a company's money woes. 

The new details come straight from Japan's Daily Shincho (via Crunchyroll) as the site compiled trial notes from the case. This is how new quotes from Kondo surfaced online, and fans were quick to comb through his words. As it turns out, the former president of ufotable felt he was protecting the studio from the industry's financial strain, but it also padded his own pockets.

"If an anime doesn't become a hit, people won't buy merchandise or come to the cafes, so in having to work hard to make [a popular anime], we always end up in the red," Kondo was quoted as saying in the case report. The quality demanded of anime keeps increasing ... but because the production costs offered by the clients are relatively low, every time we produce a work, we always end up in the red."

To keep ufotable from going too far in the red, the studio's founder illegally moved money around the company, and investigators have since found Kondo guilty of violating the Corporation Tax Act. The executive is said to have misappropriated $1.25 million USD by hiding the money made from cafe collabs and merchandise in his home. In fact, the cast report says half a million dollars was found lying loose in Kondo's house after spilling on the floor. Daily Shincho reports Kondo moved these cash assets to reduce the studio's income statement during tax season. The money was then used instead to build the studio's regional branch in Tokushima and pay salaries to staff including those of Kondo and his wife.

Now, the ufotable founder has been found guilty of violating Japan's tax law, and Kondo is facing jail time for his crimes. After the case's verdict was handed down, Kondo was sentenced to 20 months in prison alongside a three-year suspended sentence. The studio is still pushing through content like Demon Slayer season two, but its current management is keeping ufotable out of the red the right way. This explains why the studio hasn't tackled many new IPs in the last few years as adding more projects could push ufotable back into debt. 

What do you think of this latest update about the tax evasion charges? Did you expect Demon Slayer to have a bigger impact on ufotable? Share your thoughts with us in the comments section below or hit me up on Twitter @MeganPetersCB.