• Kyodo

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Prosecutors demanded a four-year prison term Wednesday for former Kochi Vice Gov. Takashi Yamamoto for allegedly lending 1 billion yen in public funds to an apparel manufacturers’ association, knowing the money would not be repaid.

The prosecutors also sought a prison term of three years for Ryozo Kawamura, 62, who headed the prefectural government’s commerce, industry and labor department, and for Koichi Tsuzuki, 58, chief of the prefectural commerce and industry policy section.

Yamamoto, 72, stands accused of breach of trust for providing the loans in 1996 to Mode Avance — an association of five clothing makers in Nankoku, Kochi Prefecture — knowing there was little prospect of recovering the money.

Yamamoto, who was vice governor from 1992 to 1998, conspired while in office with Shigeru Yasuhara, head of Mode Avance, to provide operating funds to the association in the form of loans, prosecutors said.

They set up a lending system exclusively for Mode Avance and provided it with about 1 billion yen between September and December 1996, without checking to ensure adequate collateral was put up, the prosecution said. The loans were never repaid and the association effectively failed in May 2001.

In addition to this sum, Yamamoto and Kawamura are also accused of authorizing a 200 million yen loan to Mode Avance in December 1997, also as operating funds.

Prior to these loans, the prefectural government had lent the union 1.44 billion yen to build factories. Most of the loans were in default.

The defendants also stand accused of continuing to loan operating funds to Mode Avance out of fear that they would have to take the blame for the previous loans as well as legal responsibility if the association went bankrupt.

Kawamura and Tsuzuki have pleaded not guilty, claiming the loans were authorized based on the prefectural policy “to safeguard employment” and in the belief that the association might be able to rebuild its business.

Kawamura pleaded not guilty to the charge pertaining to the 1 billion yen loan, but guilty to breach of trust over the 200 million yen loan.

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