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Prosecutors have questioned the younger brother of Economy, Trade and Industry Minister Toshihiro Nikai and one of the minister’s secretaries over allegations that a company linked to Nishimatsu Construction Co. subsidized the rent for an office used by Nikai’s political group, investigative sources said Tuesday.

The 67-year-old brother, who effectively ran Nikai’s Osaka-based political organization, Kansai Shimpu-kai, has also denied the allegation, telling prosecutors during voluntary questioning the group has never received financial support from the Nishimatsu-linked firm, OA Engineering Corp., the sources said.

However, the Tokyo District Public Prosecutor’s Office believes the company’s financial support could be a violation of the Political Funds Control Law, which bans politicians from receiving donations from businesses.

Nishimatsu instructed OA Engineering, a Tokyo-based construction consultancy, to purchase a condominium in Nishi Ward, Osaka, around 1999 and lease it to Kansai Shimpu-kai as an office for about ¥2.8 million a year, according to Nishimatsu sources. The contractor loaned about ¥40 million to OA Engineering for the purchase.

A retired Nishimatsu executive has been serving as president of OA Engineering.

Nishimatsu, meanwhile, provided ¥3 million in both 2006 and 2007 in the form of individual donations to a Wakayama Prefecture branch of the Liberal Democratic Party that Nikai heads.

According to Nikai’s political funding reports for 2006 and 2007, the LDP branch donated ¥40 million to another of Nikai’s political organizations, which provided about ¥17.2 million to Kansai Shimpu-kai.

The prosecutors suspect the rent for the Osaka condo was effectively subsidized by Nishimatsu’s political donations to the LDP branch, investigative sources said.

The fundraising scandal involving Nishimatsu first hit Ichiro Ozawa, president of the Democratic Party of Japan, when his chief aide was charged with receiving illegal donations from the company.

Nikai, an eighth-term Lower House member, used to be one of Ozawa’s right-hand men.

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