A senior official at a scandal-hit talent agency loaned 100 million yen in 1999 to the private secretary of Koichi Kato, a former secretary general of the Liberal Democratic Party, agency sources said Friday.

The 60-year-old private secretary of the LDP heavyweight borrowed the money from Yasuo Harase, 53, former head of the general affairs department at Rising Productions Co., via an affiliate of the talent agency managed by Harase, the sources said.

The private secretary, who also serves as chief accountant of a fund management body for Kato, requested the loan. He later returned the money, according to the sources.

Harase was arrested Thursday along with Tetsuo Taira, 55, head of Rising Productions, and seven others on suspicion of evading about 938 million yen in corporate taxes in the three years to August 1999.

Kato's office has declined comment on the case, saying its lawyers will handle the matter. His secretary was not identified.

The agency, which manages singer Namie Amuro, is based in Tokyo's Minato Ward.

Its affiliate run by Harase is located in Tokyo's Shinagawa Ward. Harase used to work as a secretary to a Diet member who belonged to an LDP faction headed by Kato. A company he manages in Fukushima Prefecture is also part of an LDP branch in Kato's constituency in neighboring Yamagata Prefecture.

Before his arrest, Harase said he introduced Taira to Kato through the private secretary and the four dined together a couple of times.

He denied the agency asked favors of Kato, claiming show business has no need for political favors, but regretted having caused trouble for Taira.

According to a 1997 report on political funds, the talent agency, its affiliate and the Fukushima company purchased tickets for a fundraising party for Kato worth a total of 3.5 million yen.

The talent agency, founded in 1985 with 10 million yen in capital, saw its revenues skyrocket to more than 6 billion yen after some of the singers it manages produced hits, according to a private credit research company.

Amuro sang a theme song for the Group of Eight summit in Okinawa last year.