OSAKA — The president of an Osaka computer software developer was arrested Tuesday on suspicion of illegally receiving 160 million yen in government subsidies aimed at encouraging information technology research and development.

Masaki Kambayashi, 59, of Computer Consultant, was arrested for allegedly violating a law governing subsidy issuance by receiving the subsidies from fiscal 1998 to 2000 by padding personnel and other expenses.

Prosecutors also arrested four other officials of the firm, which was set up in 1975 and has some 130 employees. All five have admitted to the allegations, according to the prosecutors.

Their arrests came after Osaka prosecutors searched the computer software developer earlier in the day.

It is the first time a company has been accused of pocketing government subsidies introduced in fiscal 1997 to promote IT research and development.

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