• Kyodo

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The former mayor of the city of Wakayama was arrested Monday on suspicion of receiving a bribe in connection with a fraud case involving the sale of a failed inn in 2000, local police said.

According to investigators, ex-Mayor Takuso Tabita, 57, received several million yen in cash from the president of a construction firm that purchased the inn, Furokan, for some 380 million yen in June 2000 and sold it to the city just two days later for 490 million yen. Police allege that Tabita received the cash in August that year as a reward for helping swing the deal.

Yoshitaka Kinoshita, the 39-year-old president of the construction firm, Yoshinaga Kensetsu, was arrested the same day on suspicion of bribery. He has already been charged with fraud.

Police said that Tabita is denying the allegations, but that Kinoshita has owned up to them.

Furokan, a three-story wooden structure, went bankrupt due to falling tourist numbers. It was to be torn down in line with new city planning proposals, but in March 2000 local residents called on the mayor to work for the preservation of the inn after they learned that a condominium complex was to be built on the site.

In May that year, a leisure facility developer signed a contract to purchase the inn and its land. Meanwhile, on June 19, Tabita told the municipal assembly that it would be “very difficult” for the city to buy the property, as it had already been sold.

On June 20, Yoshinaga Kensetsu became the sole owner of the inn, based on a May contract with the developer to buy the inn and the land for some 380 million yen. The following day, Tabita invited Kinoshita to the mayor’s office through the introduction of an assembly member and negotiated a deal to purchase the property for 490 million yen.

On June 22, the city formally decided to purchase the Furokan land and submitted necessary legislation to the assembly. Thus within two days, Kinoshita made a profit of some 100 million yen.

In August that year, the municipal land development public corporation signed a contract with Yoshinaga Kensetsu for the purchase of the land, and last March, work began on a new municipal cultural facility on the land.

Tabita was first elected mayor in 1986, but failed in his bid to become Wakayama governor in 1995. He returned as Wakayama mayor in January 1999, but has been plagued with scandals, including alleged gangster ties.

Tabita stepped down as mayor last July due to a dispute with the city assembly over the creation of a municipal university, but suffered a huge loss to current Mayor Kenichi Ohashi in the election held the following month.

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