Japanese dairy health drink manufacturer Yakult Honsha Co has vehemently denied a newspaper report that it has illegally paid ¥90m (US$750,000) to a suspected racketeer over the last five years, and passed the payments off as advertising expenses.

The Mainichi Shimbun newspaper published the story yesterday [Sunday], explaining that the racketeer had threatened to disrupt Yakult's shareholder meetings. The story also contained a denial from Yakult, but the company's shares plummeted 10.3%.

In a statement, Yakult insisted: "We have been making efforts to gain shareholders' trust by providing transparent management and open shareholder meetings, so we have no need to maintain such a (payoff) policy."