Prosecutors on Tuesday arrested the former director and deputy director of the scandal-hit Japan Kanji Aptitude Testing Foundation, alleging they caused ¥260 million damage to the nonprofit public organization by padding its budget.
The suspects are Noboru Okubo, 73, and his eldest son, Hiroshi, 45.
According to the prosecutors, the suspects had the foundation conclude unnecessary business contracts with ad agency Media Box, on whose board the two served, from fiscal 2006 through 2008.
The foundation placed orders to about 20 companies for ads and other business operations during that period, and the suspects allegedly padded the budget by ¥260 million by disguising Media Box as the agent for those contracts.
Foundation officials said the two suspects and two of their relatives received a total of ¥150 million in compensation as Media Box board members, plus ¥50 million in stock dividends.
Hiroshi Okubo son allegedly proposed the deal with Media Box, and it was approved by Noboru Okubo.
The board of directors of the foundation neither discussed the deal nor approved it, sources said.
The foundation is a public interest corporation whose profit-making activities are strictly limited by law.
