The former head of the scandal-hit school corporation Moritomo Gakuen and his wife demanded that the government sell a state-owned land lot for an elementary school that the operator had planned to open at "zero yen," threatening to sue the government for damages over waste buried at the site, sources familiar with the case said.
The government responded that the state could not sell the land at a price lower than the cost of soil improvement work, and in the end sold the property for 134 million yen, slightly above the cost of such work.
Prosecutors are investigating the case, suspecting that the government decided on the sale price in favor of the school corporation for fear of facing a lawsuit.
The revelations suggest that Nobuhisa Sagawa, then director general of the Finance Ministry Financial Bureau, may have provided false testimony when he told the Diet on March 15, 2017, that "we didn't suggest a price and they didn't express that they wanted to buy the property at a certain price."
Yasunori Kagoike, 64, former chairman of Moritomo Gakuen, and his 60-year-old wife Junko are under arrest on suspicion of fraudulently receiving public subsidies for its school businesses.
Moritomo Gakuen planned to open an elementary school on the state-owned land lot in Toyonaka, Osaka Prefecture. In May 2015, the school corporation signed a lease for the land with the ministry's Kinki Local Finance Bureau on condition that the corporation would purchase the property within 10 years.
Since lead and other toxic substances were found buried at the site, Moritomo Gakuen conducted soil improvement work and the government covered the cost amounting to some 132 million yen.
However, Moritomo Gakuen notified the government in March 2016 that more waste was found during construction work for the elementary school, and offered to buy the property, saying that if they waited for the government to remove the waste, the opening of their school would be delayed.
The couple and their lawyer held talks with the financial bureau and the Land, Infrastructure, Transport and Tourism Ministry's West Japan Civil Aviation Bureau through late May 2016 over the land deal. During their talks, the Kagoikes threatened to sue the government, saying, "Under the current circumstances, we can't open the school as scheduled."
When Kagoike met with the head of the Finance Ministry's National Property Examination and Appraisal Office on March 15, he shouted, "We have no choice but to launch a damages suit," and also mentioned Akie Abe, the wife of Prime Minister Shinzo Abe.
The national government insisted that the state could not sell the property at a price below the cost of soil improvement work, while Moritomo Gakuen said the maximum they would pay was 160 million yen.
In April, the local civil aviation bureau estimated the cost of removing waste from the land lot at some 820 million yen. The local finance bureau sold the land to Moritomo Gakuen for 134 million yen, a price calculated by deducting the cost of removing waste from the appraised price of the property.