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CHIBA (Kyodo) Former lawmaker Koichi Hamada admitted before his arrest Tuesday on suspicion of breach of trust that he sold shares he had put up as collateral in a financial deal, although he is now refusing to answer questions, investigative sources said Wednesday.

Hamada, 81, admitted to police during voluntary questioning that he sold the shares he put up as collateral to borrow ¥200 million from a company, the sources said. Hamada was a House of Representatives member until 1993 for the then ruling Liberal Democratic Party.

But since his arrest he has kept mum over the allegations, saying he “has no intention of answering” questions, the sources said.

Police searched Hamada’s office in Tokyo’s Nagata-cho district Wednesday.

The voluntary questioning took place several times at a hotel in the city of Chiba, the sources said, adding that Hamada admitted to putting up several hundred shares in an information and telecommunications company in Tokyo as collateral.

He also admitted that after borrowing ¥200 million from the industrial-waste disposal company in the city in June 2005, he got the stock certificates back from it on the pretext that he needed to change their owners of record, and that he sold them the following year to make a profit of slightly more than ¥200 million, the sources said.

Other sources said Hamada had told someone close to him that the borrowed money was invested in an overseas gold mine project. A senior official of the industrial-waste disposal company said the money “possibly went to Mongolia.”

Nicknamed “Hamako,” Hamada served seven terms in the Lower House, representing a constituency in southern Chiba Prefecture. Known for his fiery behavior in the Diet and elsewhere, he continued to appear on various TV programs after his retirement from the political scene in 1993.

His son, Yasukazu, who succeeded his electoral base as an LDP member in the Lower House, was defense minister in the previous LDP-led government.

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