OSAKA (Kyodo) -- Prosecutors on Monday searched an office of a nationalist school operator at the center of a land-deal controversy linked to Prime Minister Shinzo Abe on suspicion that its former head defrauded the local government of subsidies for its preschool.
The school operator Moritomo Gakuen was found to have been given a discount of some 800 million yen ($7.2 million) for the purchase of state-owned land in Osaka Prefecture for an elementary school planned to open on the land.
The land deal fueled scrutiny of the possible involvement of Abe and his wife Akie, who had been named honorary principal of the school. Abe has denied his or his wife's involvement in the issue.
An investigation has been under way since prosecutors received a criminal complaint alleging Yasunori Kagoike, 64, former chief of the school operator that runs Tsukamoto Kindergarten in Osaka, fraudulently obtained subsidies from Osaka Prefecture.
According to the prefecture's own probe, the kindergarten unlawfully received 34.40 million yen between fiscal 2011 and 2016 in subsidies for personnel expenses specifically designated for full-time teachers among ordinary expenses, as well as 27.44 million yen between fiscal 2011 and 2015 in subsidies for accepting pupils who need special care because of disabilities and other reasons.