Prosecutors plan to build a case against the former chief of the scandal-hit nationalist school operator Moritomo Gakuen on suspicion of unlawfully receiving subsidies from the state and local government over his school business, sources close to the matter said Monday.
The prosecutors plan to soon question 64-year-old Yasunori Kagoike, who initially drew attention for winning a huge discount for the purchase of state-owned land in Osaka Prefecture for the construction of an elementary school. Prime Minister Shinzo Abe's wife Akie had served as the planned school's honorary principle at one point.
The Osaka District Public Prosecutors Office's special investigation squad is also investigating the dubious land deal that came to light in February this year.
Separately from the land deal, the prosecutors have received a complaint alleging Kagoike unlawfully received state subsidies worth 56 million yen ($490,000) for the construction of the elementary school in the city of Toyonaka, which was scheduled to open in April.
The prosecutors have nearly finished questioning people who were involved in filing for the subsidies. They suspect that Kagoike played a key role to illegally obtain the funds, the sources said.
Kagoike is also facing another criminal complaint alleging that he fraudulently obtained subsidies from Osaka Prefecture for its preschool.
Following the land-deal controversy, Moritomo Gakuen gave up its plan to open the new elementary school and Kagoike stepped down as head of the school operator in March.
Abe has denied his or his wife's involvement in the controversially cheap sale of the government-owned land. Moritomo Gakuen bought the 8,770-square-meter plot in June last year for 134 million yen, roughly 14 percent of its appraisal value, following negotiations with the Finance Ministry's local bureau.