The news comes after a Forbidden Methods investigation, the first part of which aired September 25, in which a journalist worked as a dishwasher undercover at the company, documenting the use of schemes to avoid paying full tax for wages and instead paying a part of employee wages legally.
The journalist was employed at Tokyo City for several months, where she learned that employees from dishwashers to cleaners to chefs and their helpers were paid for their work in cash in addition to payments transferred to their bank cards.
"They'll transfer about €300 to your card and give you €100 in an envelope... well, not necessarily €100, but about €120 or €130," another employee told her.
While another dishwasher told the undercover journalist that bookkeepers decide for themselves over how much to transfer to the bank card and how much to pay 'in an envelope'.
These cash payments were provided by Dace Gaspažiņa-Korecka, the director of the Tokyo City branch where the journalist worked. Queues formed at her office which had a safe full of cash to pay their employees.
For the first, non-full month of employment the journalist was paid €121 via bank transfer and €23 in cash. While in May she received €208 via bank transfer and €67 in cash. For June the sums were respectively €262 and €18.
In July her wage was bumped and she worked harder, to receive €321 via bank transfer and a further €223 in cash.
Forbidden Methods estimates that for the 213 hours she worked in July (of which 45 were extra hours) with an hourly wage of €2.56 the employer would have to spend €840 to pay her wage plus taxes, while she'd receive €482 after tax.
While using the scheme the company spent €774 to pay her while the employee received €544.
Social security contributions for her wage should have amounted to €232 but were instead €152 under the scheme - and the difference is tax lost each month.
Many of the employees the journalist talked to had been working at Tokyo City since it opened in 2010 and that they had been receiving unofficial wages starting day one. There had been tax authority checks but employees stayed silent over the unscrupulous practices as they feared they'd lose their jobs.
An employee even ventured to suggest the State Revenue Service knew about the practice but did not care to change the situation.
Forbidden Methods asked Tokyo City managers to interview several times but were refused. The company's true ownership is opaque but it is related to businessmen from St. Petersburg where there are about 40 Tokyo City restaurants.
There are four Tokyo City restaurants in Latvia.
The Latvian operations are managed by one local Dmitrijs Tribuncovs, a board member at the companies managing Tokyo City. While the true owner of the business seems to be the Russian restaurant chain owner Sergey Simarev.
Symarev could not be reached for comment.
His daughter Maria owns land and part of a building at the Jūrmala resort town, on Jomas street 65/67. The address also hosts a Tokyo City restaurant, which she had bought for about €1m in 2012 after Latvia introduced 'golden visas' or residence permits in return for investment.