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Prosecutors arrested a member of Nihon University’s executive board and another man on Thursday for allegedly causing damage worth ¥220 million to the university in a possible breach of trust case.

The special investigation squad of the Tokyo District Public Prosecutor’s Office suspects the 64-year-old board member of the major Japanese private university, Tadao Inoguchi, and Masami Yabumoto, a 61-year-old former head of Kinshukai Group — a medical corporation group based in the western Japan city of Osaka — of diverting ¥220 million from the educational institution through a project to rebuild the university’s aged Itabashi Hospital in Tokyo’s Itabashi Ward.

The special investigation squad searched the house of Nihon University Chairman Hidetoshi Tanaka, 74, in Tokyo’s Suginami Ward on Thursday afternoon, as part of its efforts to uncover the full picture of the case.

Around mid-February last year, Inoguchi and Yabumoto allegedly falsified the results of a competition to choose which company will be in charge of design work for the rebuilding project in a way to allow a Tokyo-based design firm to win the order.

Around May the same year, the two instructed the design firm to send ¥220 million of some ¥730 million Nihon University paid to the company as an advance to a consulting firm based in the Japanese capital’s Minato Ward.

The consulting firm, which is fully owned by Yabumoto, is believed to have received the money in early August.

The special investigation team has found that the consulting firm was a bogus company.

Nihon University entrusted the selection of a design firm for the rebuilding project to Nihon University Enterprise Co., established as a wholly owned unit of the university in Tokyo’s Setagaya Ward, to be responsible for goods procurement and facility management. Inoguchi doubled as a board director of Nihon University Enterprise.

According to informed sources, Inoguchi has denied his involvement in the case, telling the special investigation squad that he does not know anything about it.

Inoguchi is also suspected of receiving a total of several tens of millions of yen from a company linked to Kinshukai Group via multiple firms, after the ¥220 million was sent from the design firm to the consulting firm.

The investigation team is looking into the connection between the money Inoguchi received and the rebuilding project.

Last month, the special investigation squad searched the university’s headquarters in Tokyo’s Chiyoda Ward, Nihon University Enterprise, Tanaka’s house and elsewhere to grasp the money flows.

Nihon University released a comment saying that the scandal is very regrettable.

“We will continue to offer full cooperation to the investigation,” the comment read.

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