The Tokyo District Court ruled Monday against the pro-Pyongyang group Chongryun and ordered it to repay 62.7 billion yen in debts to the government-backed Resolution and Collection Corp., paving the way for the seizure of its Tokyo headquarters.
The ruling, including a provisional execution that makes the 10-story headquarters of Chongryun, or the General Association of Korean Residents of Japan, available for seizure by RCC, follows revelations last week that Harvest, an investment advisory firm headed by a former chief of the Public Security Intelligence Agency, had attempted to purchase North Korea's de facto embassy building for 3.5 billion yen.
Former agency chief Shigetake Ogata's attempt failed due to lack of funds, but it prompted the Tokyo Public Prosecutor's Office to suspect wrongdoing in the building transaction and to search his house and office last Thursday.
In the lawsuit, filed in November 2005, RCC had claimed 62.7 billion yen in bad loans it took over from 16 failed North Korea-linked credit unions in the late 1990s were in reality loans to Chongryun.
RCC had been demanding that Chongryun repay the amount. The collection body filed the suit after the North Korean group acknowledged the details but claimed it could only repay a fraction of the debt.
Presiding Judge Tsutomu Arai ruled that the entire sum must be repaid to RCC on grounds that the plaintiff's request was rational.
The court also granted the provisional execution, rendering the headquarters of Chongryun, which is being monitored by the security intelligence agency for subversive activities, subject to seizure. A provisional execution can be acted on before a court ruling has been finalized, such as after an appeal.
Lawyer Koken Tsuchiya, 84, who represented Chongryun in the suit, denounced RCC, claiming its purpose was not to collect Chongryun's debt but instead to seize its headquarters and dismantle the pro-Pyongyang group.
"Such an act by RCC would become a huge obstacle to establishing diplomatic relations between Japan and North Korea," the former president of the Japan Federation of Bar Associations told reporters, noting his negotiations with Ogata regarding the purchase of the building were legitimate and benevolent in nature.
Tsuchiya also revealed to reporters that the rights to the headquarters building were returned Monday morning to its original owner, a limited partnership company run by Chongryun, after it was clear the transaction could not succeed.
Ogata, speaking with reporters after the district court ruling, claimed his attempted purchase of the building was a friendly gesture amid fears that a verdict against Chongryun would leave its headquarters open to seizure and disrupt the lives of North Koreans in Japan.
The former security agency head acknowledged that he felt uneasy when first contacted by Tsuchiya in April regarding the purchase but later became persuaded to support the group.
"It cannot be said that Chongryun will not cause any trouble, and therefore it should remain under vigil," Ogata said. "But I was well aware that its headquarters works as an embassy that North Koreans residing in Japan rely on to send medical supplies and money to their homeland. I believe that the lives of North Koreans in Japan should not come under suppression."
Ogata, now a lawyer, claimed he was in negotiations with a couple of fund investors to finance the purchase. He was told that the money would be ready prior to Monday's verdict.
"I don't feel I was deceived, – mislead,” he said of his failed purchase attempt.
Chongryun did not issue any official remarks regarding the ruling or on the sale of its headquarters, but Tsuchiya revealed before the verdict that he would discuss with the group a possible appeal in an effort to press the court to arrange a levelheaded reconciliation plan with RCC.
For related stories:
Chongryun HQ sold to ex-intelligence head
Chongryun Tokyo HQ sale seems set to fail