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Tokyo police said Tuesday they have arrested the former president of a Mitsui & Co. affiliate on suspicion of embezzling some 134 million yen in corporate funds in 1999 and 2000.

The Metropolitan Police Department took into custody Yasuteru Shigeta, 58, former president of Bussan Creative, a Tokyo-based auto parts importer currently undergoing liquidation proceedings.

In addition, they have obtained an arrest warrant for a 56-year-old senior official of an auto sales firm in Yokohama who also allegedly embezzled company funds, police said.

Investigators allege the two conspired to make it appear as though Bussan Creative purchased classic cars from the Yokohama-based firm on four occasions between November 1999 and February 2000, when Shigeta served as president of the importing company.

He allegedly made fake sales contracts, transferred the money for the purported purchases from Bussan Creative to the auto sales firm, and embezzled the money.

Shigeta has denied committing embezzlement, claiming the money was loaned to the auto sales firm and the sales contracts were not faked, according to police.

In June, a lawyer acting as a liquidator of Bussan Creative filed a complaint against Shigeta with the Akasaka Police Station in central Tokyo, police said.