OSAKA – Kohei Nakabo, arguably one of Japan’s best-known lawyers, gave up his practice Friday after being questioned by prosecutors over allegations that he swindled a creditor while heading a quasi-governmental debt-collection body.
The 74-year-old is a former chairman of the Japan Federation of Bar Associations and also served as president of Resolution and Collection Corp. He submitted documents to the Osaka Bar Association on Friday morning that nullify his registration as a lawyer and a member of the local lawyer body.
During a subsequent news conference, Nakabo said he was aware of the swindle.
“When I first heard of the plan, I thought it was a rather selfish deal, but I was convinced after listening to the explanation of those involved,” Nakabo said.
He confirmed that he had been questioned on two occasions by prosecutors regarding the case, and that three of his subordinates at the time had also been quizzed.
He apologized to the public for his actions, and noted that while his fate is being decided by investigative and judicial authorities, as an act of social responsibility, he would give up his practice.
In October 2002, a criminal complaint was filed against Nakabo and the three others over a debt-collection deal. According to the complaint, between 1997 and 1998, Nakabo and other senior RCC officials decided to sell a plot of land in the city of Sakai, Osaka Prefecture, owned by an Osaka-based condominium developer that was intended for an aborted hotel construction project. The proceeds from the sale of the roughly 17,000-sq.-meter plot were to go toward collecting the firm’s debts.
RCC, which held the mortgage on a 1,500-sq.-meter portion of the land, had initially been offered 4.3 billion yen for the land, the complaint said.
But RCC allegedly lied to Bank of Yokohama and Meiji Life Insurance Co., which held the remainder of the mortgage on the land, telling them it would sell the land for about 3.2 billion yen when it asked them to remove their fixed mortgage on it.
The land was later sold for 3.3 billion yen, and RCC, whose fixed mortgage on the land was only worth 1.1 billion yen, collected some 1.5 billion yen from the deal. The remaining 1.8 billion yen was split between the bank and the life insurer.
The company that owned the land, Asahi Juken, collapsed last month. The party who filed the complaint is the former president of an Asahi Juken subsidiary.
Nakabo became head of the Housing Loan Administration Corp., RCC’s predecessor, in July 1996. The body worked to collect the huge amount of soured loans extended by seven failed “jusen” housing loan firms. Nakabo resigned as RCC adviser in January 2001 over the Asahi Juken incident.
Sources said Friday that Nakabo allegedly gave the green light to RCC officials to lie to the bank and life insurer that the land would be sold for about 1 billion yen less than the actual figure.
Tokyo district prosecutors are expected to discuss the case with the Supreme Public Prosecutor’s Office and the Tokyo High Public Prosecutor’s Office before deciding on how to proceed.
RCC has since reached compensation settlements with Bank of Yokohama and Meiji Life.
Nakabo, a graduate of Kyoto University, became a lawyer in 1957. He has participated in many famous lawsuits, including leading the team of lawyers assisting victims who consumed arsenic-tainted powdered milk in the mid-1950s. He also headed the legal team for residents of Teshima Island in the Seto Inland Sea who filed a lawsuit in connection with the illegal dumping of industrial waste on their island.
During Friday’s news conference, Nakabo accepted the blame, saying he was the man who made the final decision on the matter.
“My subordinates were not working for the company’s profit but with the passion to collect even a single yen” from debt-ridden firms, he said. “They may have become a bit carried away. I gravely accept responsibility.”
The Osaka bar meanwhile said the Japan Federation of Bar Associations cannot formally accept Nakabo’s application to leave because it is still screening a request submitted earlier this year that he be punished over the Asahi Juken deal.
Nakabo said he decided to quit his practice after discussing the matter with the current head of RCC.
“I have been tough in pursuing the responsibility of banks (which lent massively to questionable borrowers), and so I must be strict on myself as well,” Nakabo said. “But the only things I owned that I could throw away were my life and my practice.”
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.