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Editorial: Tokyo prosecutors must get to bottom of scandal in arrest of univ. board member

Nihon University executive board member Tadao Inoguchi and Masami Yabumoto, former head of Osaka medical corporation Kinshukai, have been arrested by the investigative team at the Tokyo District Public Prosecutors Office for alleged breach of trust. This case involves the largest university in Japan, boasting nearly 70,000 students.

    It is suspected that last summer, the two instructed an architectural firm to unlawfully divert 220 million yen (approx. $1.97 million) out of the sum paid for a contract to rebuild Nihon University Hospital to a dummy medical consultancy firm, causing a financial loss for Nihon University.

    We want the prosecutors' investigative team to thoroughly expose the murky flow of money.

    It is believed that under orders from Inoguchi, the money was deposited to the shell corporation for which Yabumoto is the sole shareholder. Subsequently, 25 million yen (approx. $223,000) reportedly reached Inoguchi via multiple companies. A major question in the investigation is: who got how much money, and for what?

    Nihon University Enterprise Co., an affiliate company of Nihon University, selected the architectural firm. Inoguchi supervised the company's businesses, and is suspected of doctoring the architectural firm's evaluation scores in the selection process.

    Nihon University Enterprise has grown its sales by undertaking a wide range of projects, including university supplies procurement and university asset management. At the same time, no external checks were conducted because it is wholly owned by Nihon University.

    Hidetoshi Tanaka, chairman of the university's board and head of management, must be held accountable.

    Tanaka has been chairman of the board since 2008 and holds immense power. He established Nihon University Enterprise Co. after becoming chairman of the university board, and placed Inoguchi in charge of the company. Now the prosecutors' investigative team are searching Tanaka's home.

    During the dirty tackle scandal three years ago involving a Nihon University American football team player, a third-party panel criticized Tanaka as having "neglected the dysfunction of organizational governance." Tanaka was asked to provide an explanation, but has yet to give a press conference.

    How Yabumoto became involved will also be a focal point in the case.

    Osaka-based Kinshukai, is one of Japan's leading medical corporations. It operates multiple hospitals, nursing care facilities, nursing schools and other related facilities primarily in the western Japan prefecture of Osaka. As the corporation's head, Yabumoto had widespread connections in politics and bureaucracy.

    In the 2020 academic year, Nihon University received around 9 billion yen (approx. $80.5 million) in government subsidies for private schools. It is a public institution. If the allegations are true, it means government funds have been exploited. The prosecutors' investigative team must get to the bottom of what happened.

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