A Tokyo-based cooperative association sanctioned by the Ministry of International Trade and Industry charged companies 1 million yen as an initial membership fee, in violation of its founding contract, MITI said Monday.
The association, Shinka Jigyo Kyodo Kumiai, planned to build health examination facilities throughout the country, and recruited smaller companies with the ruse that the association was getting state loans, MITI's Kanto Regional Bureau discovered.
Many companies apparently joined in the belief that membership would help them get orders in the midst of the recession.
MITI also found that the association had persuaded 37 companies to join in 11 prefectures where the association is not authorized to do business.
MITI has told the association to refund all initial membership fees and investment money it had raised in the 11 prefectures, as well as membership fees collected in eight other prefectures, including Tokyo and Kanagawa.
As of July, the association had 137 member firms in 20 prefectures, and had raised about 300 million yen in admission fees and investment capital from some 100 of the 137 firms. Some of those not making payments were older members.