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Bunka Gakuen, the Tokyo-based operator of noted fashion school Bunka Fashion College, failed to declare some 250 million yen in income over a five-year period up to March 2000, sources close to tax authorities said Wednesday.

Public corporations such as school corporations are only subject to taxation on their earnings through sales of goods and other activities. Because Bunka Gakuen’s sales sections have been operating in the red, no back taxes emerged as a result of the discoveries, according to the sources.

According to the sources, Bunka Gakuen, based in Tokyo’s Shibuya Ward, hid roughly 7 million yen in income by falsifying and concealing revenue from advertisements placed in a magazine published by its publication division.

The advertisements in question were placed by Japan Airlines in the magazine Soen, the sources said. Bunka Gakuen allegedly received a portion of the payment for the ad in the form of airline tickets and did not include the amount as revenue.

However, because the tickets were subsequently used by employees for business trips, a portion of the amount was entered in the organization’s books as expenses, they said.

It was also discovered that Sunao Onuma, head of Bunka Gakuen’s board, had been using part of the organization’s guest house facilities in Tokyo’s Shibuya Ward for several years for personal purposes, the sources said.

Tax officials have determined that the rent he did not pay for use of the facilities was tantamount to salary paid by Bunka Gakuen.

They added that the organization failed to report this amount, calculated at several million yen, on its income declaration forms, the sources said.

Tax officials also said an interior decorating company whose president is Onuma’s eldest daughter also failed to report about 30 million yen. The firm had a lot of business with Bunka Gakuen, the sources said.

The company’s president set aside a portion of the firm’s sales and purchased personal accessories with company money, the sources said, adding that the firm has been ordered to pay an additional 5 million yen in back taxes and fines.

Officials representing the school corporation acknowledged that tax authorities had pointed out the discrepancies, but said the school operator had a “different view” of how the revenue should be handled.

Bunka Gakuen was set up as a school corporation in 1935.

After receiving authorization, it became the nation’s first educational institution specializing in fashion, attracting famous designers, including Junko Koshino and Kenzo Takada.

Onuma has headed the board of directors since 1960 and is also currently serving as chairman of the Association of Private Universities of Japan.

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