Japan arrests ex-head of school operator over subsidy fraud

Yasunori Kagoike, operator of a nationalistic school in Osaka, listens to a question while giving a sworn testimony to a lower house budget committee in Tokyo on March 23, 2017. (Photo by AFP)

Japanese prosecutors have arrested the former head of a school operator with ties to Akie Abe, the wife of Prime Minister Shinzo Abe, on suspicion of illegally receiving subsidies, media says, reviving a months-old scandal.

Abe's public support is crumbling, hit by scandals over suspected cronyism, a defense ministry cover-up that forced the resignation of his protégé, former defense minister Tomomi Inada, and voter perceptions of his growing arrogance.

Prosecutors in the western city of Osaka arrested Yasunori Kagoike, former chief of educational institution Moritomo Gakuen, and his wife, Junko, for fraudulently receiving state subsidies to build an elementary school, Kyodo news agency said.

In applying for the subsidies, Moritomo Gakuen submitted a document showing building costs of 2.38 billion yen ($22 million), but the figure was suspected to have been padded to attract greater subsidies, Kyodo quoted unnamed investigative sources as saying.

Before his arrest, Kagoike had denied any wrongdoing, the agency added.

Yasunori Kagoike, center, head of an ultra-nationalistic Japanese school operator, walks through the hallway after testifying before an upper house panel at the parliament in Tokyo, on March 23, 2017. (Photo by AP)

Reuters could not reach Kagoike and his wife to seek comment. Efforts to reach their lawyers were unsuccessful.

Officials of the public prosecutors' office in Osaka were not immediately available to comment.

Besides the subsidies, opposition parties raised questions about Moritomo Gakuen's purchase of land for the new school, whose honorary principal Akie Abe had been set to have become.

The operator bought state-owned land for just 14 percent of the appraisal price, Finance Ministry data showed, a discount officials have said was intended to account for cleanup costs.

Abe has said neither he nor his wife intervened in the land deal or helped the school get accredited. Akie cut ties with the elementary school after the scandal broke earlier this year.

In another scandal, Abe has repeatedly denied having done any favors to help a friend, Kotaro Kake, the director of educational institution Kake Gakuen, win approval for a veterinary school in a special economic zone.

(Source: Reuters)