Prosecutors on Wednesday afternoon served a fresh arrest warrant on a former chief of KSD, a government-linked group that provides industrial accident insurance to small businesses, on suspicion of breach of trust, investigative sources said.

The Tokyo District Public Prosecutor's Office suspects that Tadao Koseki, former KSD president and founder, caused KSD Homeikai, a voluntary association, to suffer 100 million yen in losses by forcing the organization to purchase around 150,000 CDs of a female Japanese singer who appears in a KSD advertisement, the sources said.

According to the sources, Koseki, 79, as president of KSD Homeikai, ordered the association to purchase the singer's CDs on three occasions coinciding with her latest releases between 1998 and this year and to give them away to members as part of a welfare program.

The prosecutors also suspect that Koseki had let an acquaintance's company mediate in a printing project involving a magazine for KSD members in order to benefit the friend's company.

Thanks to the deal, the company earned an annual profit of about 10 million yen by mediating between a major printing company and KSD Agency, a KSD affiliate that published the magazine.

Koseki and two other former officials of KSD were arrested Nov. 8 on suspicion of embezzlement. Koseki is suspected of ordering money be withdrawn from KSD's bank account and given to a woman with whom he was having a relationship, and the two former officials are suspected of helping Koseki funnel the money to her.

KSD is also known to have made donations totaling some 250 million yen to politicians of the ruling Liberal Democratic Party through various channels, including affiliated organizations, between 1995 and 1999, the sources said earlier.

Koseki resigned as KSD president following an Oct. 6 raid by prosecutors on KSD's Tokyo headquarters and a local LDP office.

KSD is a mutual aid union for small-business owners and is overseen by the Labor Ministry. It mainly offers insurance policies for small-business owners under which compensation is paid to their employees in the event of industrial accidents.

KSD has some 1.07 million members. Annual premiums for the foundation's mutual aid insurance total 25 billion yen. KSD was established in 1964 by Koseki, who once worked at a labor standards office.