A Defense Agency official and three-defense equipment suppliers were indicted Tuesday on charges of inflicting 2.1 billion yen in damages on the state government through illegal procurement deals of defense equipment.
The four, who have been under arrest since Sept. 3, reportedly conceded the charges. The Tokyo District Public Prosecutor's Office alleges that Kenichi Ueno, 59, former deputy head of the agency's Central Procurement Office, conspired with the three suppliers and curtailed the amount that Toyo Communication Equipment Co. had overcharged the agency on condition that the firm employ retiring agency officials. The agency found out in April 1994 that Toyo, an affiliate of electronics giant NEC Corp., had overcharged the agency 2.99 billion yen through the firm's sales of defense equipment between fiscal 1989 and fiscal 1993, it said.
Ueno, however, ordered agency staffers and the supplier to recalculate the overcharged amount, fearing that his responsibility would be grave if the amount topped 1 billion yen, prosecution sources said. Ueno then ordered Toyo in March 1995 to repay only 874 million yen, inflicting some 2.12 billion yen in losses on the nation's coffers, according to the indictment.
The three others indicted on Tuesday were: Shinichi Ito, 66, former chairman of Toyo Communication; Yasunori Nagamoto, 54, the firm's section chief in charge of public-sector business; and Hideo Arai, 58, former head of NEC Corp.'s defense-related business section. Prosecution sources say that in return for being given the break on the repayment, Toyo hired three-retired Defense Agency officials as advisers. While advisory fees were periodically paid to the three, they were seldom been seen at the firm.