Founder of Benihana Resigns as He Faces Federal Scrutiny

Rocky Aoki, the colorful founder of the Benihana steakhouse chain where Japanese chefs entertain diners with their flashing knives, resigned as chairman and chief executive Tuesday after coming under federal investigation.

The U.S. attorney’s office in New York City would not disclose the nature of the investigation. Benihana issued a statement saying only that it involved Aoki’s “personal investment activities.”

Aoki, 58, told the Benihana board that he hoped his departure would separate the impact of the investigation from the business. He also resigned from the board and will act only as a consultant.

Benihana, created by Aoki in New York City in 1964 using profit from a summer’s worth of ice-cream sales, was among the first theme restaurants to catch on. Chefs prepare meals with flourish as patrons sit around a communal grill. Shrimp tails fly, knives twirl in the air, and cooking-oil flames shoot high.

Miami-based Benihana owns 49 restaurants, and 12 others are licensed under its name.

Aoki, an adventurous figure who has engaged in treasure hunts and balloon adventures, “cannot comment on any matters related to the ongoing investigation except to say they are unrelated to the business and securities in the Benihana companies,” said Frank Summerfield, spokesman for Aoki.

Joel Schwartz, company president since 1982, assumed the title of CEO.

Benihana has been successful in attracting newcomers to an Americanized form of Japanese food but has stumbled in the frozen-food business and a seafood restaurant start-up in the 1980s.