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Editorial: Chair of Japan's Nihon University must publicly account for financial scandal

Hidetoshi Tanaka, chairman of the board at Nihon University, is yet to publicly explain breach of trust accusations involving a former executive at the university and other figures. For 13 years, Tanaka has wielded enormous power from the top. The issue must be resolved.

    Individuals including Tadao Inoguchi, a former board executive at the university, and Masami Yabumoto, former director of medical corporation Kinshukai group, have been indicted on breach of trust charges.

    Through planned rebuilding projects for affiliated hospitals and lease contracts for medical equipment, Nihon University was made to spend huge amounts, and the accused are suspected of causing losses in excess of some 400 million yen (about $3.5 million) in total. It is said that more than 400 million yen was transferred to a company affiliated with Yabumoto.

    In response to a probe by the Tokyo District Public Prosecutors Office's special investigation unit, Yabumoto stated that a total of about 60 million yen (around $525,000) had been handed to Tanaka's side. Inoguchi reportedly admitted that he had facilitated the deal.

    Tanaka had drawn Inoguchi close by setting him up in an important external role, assigning him as a senior employee at affiliate firm Nihon University Enterprise Co., the stage for the dishonest acts that took place this time. Management was left up to Inoguchi.

    With the weight of the chairman behind him, Inoguchi reportedly took shortcuts through the university's internal processes for selecting medical equipment, among other actions, and pushed through demands.

    Tanaka's home was searched by prosecutors, and he was also subjected to questioning. He cannot avoid his responsibility to provide an explanation.

    Although more than two months have passed since prosecutors began a compulsory investigation on the issue, the university has yet to hold a news conference on the matter. Its response thus far has amounted only to the publication on its website of comments in Nihon University President Naoto Kato's name, stating that an investigative team has been established.

    The university has not reported damages to police, either, on the grounds that it is not clear whether the university suffered losses. This response is unlikely to dispel the concerns and anxieties felt by students, their guardians, teaching staff and others.

    Nihon University has almost 70,000 students, the most for an academic institute in the country. In the previous academic year, it was paid around 9 billion yen (about $78.7 million) in public funds from government subsidies earmarked for private educational institutions. It also receives favorable tax treatment. It is a highly public organization.

    During the dirty tackle scandal three years ago involving its American football team, a third-party panel criticized Tanaka as having "neglected the issue of dysfunction in organizational governance." We cannot say that the university's culture has improved since then.

    The chairman, who has continued an autocratic management style at the university, must seriously accept the issues brought up by this incident, and bring it to a close.

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