Former Sogo Co. Chairman Hiroo Mizushima will plead not guilty to accusations that he attempted to hide some 150 million yen in assets from creditors as the major department store operator appeared destined for failure, sources close to the case said Saturday.

According to the sources, Mizushima's lawyers will enter the plea at his first trial hearing, to be held at the Tokyo District Court on Wednesday.

The 89-year-old defendant will acknowledge that he withdrew money he had deposited, the sources said. However, his lawyers will maintain that Mizushima's personal guarantee of the loans extended to Sogo by the Industrial Bank of Japan, which form the basis of the seizure of the former chairman's assets, is invalid, they said.

As such, his withdrawal of his money does not constitute an attempt to hide assets, his legal counsel contends.

According to the indictment, Mizushima was a guarantor for 110 million yen in loans extended to the Sogo group by the IBJ. From July last year -- immediately after the department store operator filed for court-led rehabilitation -- he began withdrawing money from bank accounts. Some 150 million yen was transferred to his wife's name, an act that prosecutors say was an attempt to avoid seizure of the assets.

Separately, Sogo, which is currently undergoing rehabilitation measures under new management, has demanded compensation of roughly 12 billion yen from Mizushima, who was known to run the firm with an iron hand. The district court determined that the amount of compensation should be to the tune of about 6 billion yen.

Although Mizushima has indicated his willingness to hand over a part of his personal assets of about 1 billion yen, the issue of compensation is still being fought in court and discussions have not made any visible headway.

Mizushima, formerly a banker with the IBJ, became vice president of Sogo in 1958 and effectively had power over the firm until he stepped down as chairman in April 2000.

He was arrested in May this year by the Metropolitan Police Department and released on bail. Although he was temporarily hospitalized, sources say he is in good health and is attending meetings with his lawyers.