Two former presidents of Jomo Shimbun, a Gunma Prefecture newspaper, have been arrested on suspicion that they caused the company financial damage through dubious financial transactions with a realtor, police said.
Tatsuo Satori, 60, and Toyomi Suzuki, 67, allegedly had Jomo Shimbun extend 200 million yen in loans to a real estate company effectively run by Satori in 1997 without getting approval from the newspaper's board of directors, police officials said. Also arrested was Zentaro Sekiguchi, 64, a former auditor at the newspaper. Although the men were arrested Monday on breach of trust charges, police have learned that they repeatedly had the paper make similar loans to the company, which was not identified, between 1995 and 1997. The loans are estimated to total 4 billion yen.
Investigators also plan to grill Satori and Suzuki on suspicion that they had an affiliate of the newspaper assume about 4.4 billion yen of the real estate firm's debts, the officials said.
The real estate company in question built a resort condominium in November 1994 in Kusatsu, Gunma Prefecture, after borrowing 8 billion yen from general trading house Kanematsu Corp.
But the debt weighed heavily on the firm's management as sales were sluggish, and the firm eventually collapsed.
Satori served as president of the newspaper for eight years until 1998, and his successor Suzuki was at the company's helm until March 2000.