OSAKA (Kyodo) -- The Osaka District Court put a scandal-mired school operator into administration Friday after it applied for bankruptcy protection.
The links between the nationalist school operator, Moritomo Gakuen, and Prime Minister Shinzo Abe and his wife have been probed in recent months following its acquisition of state-owned land last year for a dramatically reduced price.
The school will try to rebuild its finances after taking on weighty debts connected with the elementary school it had hoped to open this month on the land in Toyonaka, Osaka Prefecture.
The school buildings stand empty after prefectural authorities refused in March to grant Moritomo Gakuen accreditation.
A credit research company has put Moritomo Gakuen's debts at 2 billion yen ($18 million).
The operator's chief, Chinami Kagoike, who took over from her father Yasunori this month, submitted the application to the Osaka District Court.
"We are truly sorry for having caused all sorts of concern," she said at a press conference in Osaka on Friday evening alongside lawyers for the operator.
Kagoike said neither of her parents will have any further involvement in the operation of Moritomo Gakuen or its kindergarten.
"It must be said that the cause of the disarray lies with Moritomo Gakuen," one of the lawyers said at the press conference.
The construction company contracted to build the school said Moritomo Gakuen still owes it more than 1.6 billion yen.
The district court has already given provisional approval for the seizure of land and buildings of the Moritomo Gakuen-operated kindergarten and the elder Kagoike's home to pay the debt to the construction company.
Yasunori Kagoike gave sworn testimony last month before committees in the Diet, in which he said his relationship with the Abes included receipt of a 1 million yen donation to help build the now-shuttered elementary school.
The Abes have denied making the donation as well as involvement in the land deal.
Yasunori Kagoike has said he does not believe the Abes were directly involved in having the price of the land cut, but suspects someone else may have intervened with their interests in mind.
Moritomo Gakuen's teaching philosophy has also come under scrutiny. The kindergarten it runs is known for making its pupils memorize the Imperial Rescript on Education, an 1890 edict that was later used to promote militaristic and emperor-oriented education.
Prefectural officials questioned Yasunori Kagoike and his wife Junko, then principal of the kindergarten, over suspected hate speech in January after parents were given material disparaging Korean residents of Japan and Chinese people.