KOCHI – Former Kochi Vice Gov. Takashi Yamamoto was given a suspended jail term by the Kochi District Court on Wednesday for loaning 200 million yen in public funds to a clothing makers’ association in 1997 even though he knew the money would never be repaid.
“It did not serve the public benefits of the prefecture,” presiding Judge Tetsuo Sano said before sentencing Yamamoto to a year and two months in prison, suspended for two years.
It was the first case in Japan in which a civil servant has been convicted of breach of trust in connection with official loans.
Yamamoto, 73, and two other former prefectural officials had been charged with breach of trust for lending a total of about 1.2 billion yen in 1996 and 1997 to Mode Avance in Kochi Prefecture without properly checking the collateral.
Of the 1.2 billion yen, the court concluded that 200 million yen handed out in 1997 was used only to stave off the collapse of the association. The association went effectively bankrupt in 2001.
The remaining 1 billion yen in loans, extended between 1995 and 1996, does not constitute breach of trust because Yamamoto judged that the association’s revival was still possible at that point, the court said.
Prosecutors had demanded a four-year prison term for Yamamoto, saying he approved the extension of the loans only to “avoid harsh criticism from the local assembly should the association go under.”
The prefectural government had also previously loaned the association 1.4 billion yen to build factories — most of which had turned sour, according to the indictment.
The prosecutors had argued that the three systematically extended questionable loans to Mode Avance, despite knowing there was little prospect of recovering the money.
The three did not present their decision to the prefectural assembly, and the loans have never been repaid.
The former vice governor had pleaded not guilty, claiming the public money was used to “foster industries and safeguard employment.”
The court also sentenced Ryozo Kawamura, 62, who headed the prefectural government’s commerce, industry and labor department, to a year in prison, suspended for two years.
Koichi Tsuzuki, 57, former chief of the prefectural government’s commerce and industry policy section, was found not guilty.