OSAKA -- The housing firm Asahi Juken, a major borrower from the bankrupt "jusen" mortgage lenders, began forging sales contracts for mortgaged properties to bilk creditors in autumn 1993 at the instruction of the firm's president, Kizo Matsumoto, sources alleged.
Matsumoto, 62, was arrested Tuesday for defrauding a creditor of 600 million yen after forging a contract for the sale of mortgaged property, Osaka Prefectural Police said.
He is also suspected of advising a creditor to erase mortgage rights to a property in autumn 1993 and to sell the property to Asahi Juken below its valued price of 2.1 billion yen, the sources said.
Matsumoto also allegedly instructed subordinates to forge sales contracts for mortgaged properties by underestimating the properties' value and then concealing the sales receipts. These funds became an important source of company income, the sources said.
Osaka police are trying to find about 10 billion yen from such sales that was kept hidden by the group, the sources said. Matsumoto began ordering employees to carry out the fraudulent transactions after the company entered a management crisis around autumn 1993, the sources said.
He reportedly told employees the firm would go under unless they hid between 15 percent and 20 percent of sales receipts from mortgaged property sales, and he drew up their bonuses according to how well they complied with his order, they said.