Ex-MOF Exec Sagawa Unlikely to Be Indicted over Moritomo Scandal

May 31, 2018

Osaka- Public prosecutors are seen giving up indicting former Japanese Ministry of Finance official Nobuhisa Sagawa over the falsification of documents on the controversial huge discount sale of a state land lot to school operator Moritomo Gakuen, it was learned Thursday.

More than 300 sections in 14 sets of documents were manipulated after the questionable land deal came to light in February last year. Among the altered sections were descriptions on the process of negotiations on the land deal between the MOF and Moritomo Gakuen and those including the name of Prime Minister Shinzo Abe's wife, Akie.

The MOF's Financial Bureau is believed to have instructed the falsification to make the sections in question consistent with remarks Sagawa made over the land deal at parliamentary meetings. Sagawa was director-general of the bureau when the tampering took place.

By questioning Sagawa and MOF officials involved in the alteration on a voluntary basis, the special investigation team found that many parts of the documents were doctored.

But the team sees it difficult to indict them, as key parts in the documents, such as the terms of the land sale contract, were not falsified and it therefore cannot be said that the essence of the papers changed substantially compared with original documents, according to informed sources.

The land plot in the city of Toyonaka in Osaka Prefecture, western Japan, was sold to Moritomo Gakuen in June 2016 for 130 million yen, after some 800 million yen in costs to remove waste buried at the site was deducted from the appraisal value of the land.

Moritomo Gakuen planned to establish an elementary school on the land, but gave up the project in March last year, after coming under fire over the land deal. The prime minister's wife was once appointed honorary principal of the once-planned school.

The prosecutors are also likely to refrain from indicting other officials over the discount land sale, the sources said.

A criminal complaint has been filed against the officials for allegedly inflicting financial damage on the state through the huge discount sale. Among them is Hidenori Sakota, who was serving as director-general of the Financial Bureau when the land sale negotiations were being held between the ministry's Kinki Local Finance Bureau and Moritomo Gakuen.

After interviewing with officials of a drilling company and analyzing relevant materials, the prosecutors concluded that the waste removal costs cannot be judged to have been excessively padded, the sources said.

The MOF officials included in the land contract a special provision aimed at preventing a situation in which Moritomo Gakuen would seek damages from the state in case of a delay in opening the elementary school due to the waste removal work.

Against this background, the prosecutors believe it would be difficult to prove that the MOF officials deliberately caused financial damage to the state, the sources said. Jiji Press