National Tax Agency head Nobuhisa Sagawa on Friday stepped down to take responsibility for the lingering controversy concerning a state-owned land sale, Finance Minister Taro Aso said.
The heavily discounted land deal in Osaka involving a school operator at the center of favoritism allegations against Prime Minister Shinzo Abe has drawn renewed attention following a report that relevant Finance Ministry documents were falsified.
On Friday, the government also confirmed reports that a ministry official involved in the state land sale died recently of suicide.
"We accepted Mr. Sagawa's request to resign" for causing trouble in Diet deliberations, Aso told a press conference. Sagawa has been under fire for allegedly making false remarks in the Diet when he was head of the ministry's Financial Bureau pertaining to the land sale.
Aso also said Sagawa was slapped with pay cuts for undermining confidence in the government.
Aso, who doubles as deputy prime minister, said the ministry is expected to present early next week a report to the Diet on its internal probe into whether the alleged documents exist.
Sagawa's resignation is likely to deal a blow to Abe as he and Aso put the 60-year-old bureaucrat in charge of the tax agency and defended him against an opposition-party backlash as the right person for the job.
Aso, however, denied responsibility for appointing Sagawa to the post, and said was "not thinking" of resigning himself.
While serving as director general of the ministry's Financial Bureau, Sagawa denied there had been prior negotiations with school operator Moritomo Gakuen over the price of a plot of land before its sale, and testified in the Diet that the ministry had discarded the negotiation documents.
The opposition camp has accused Sagawa of false testimony following the discovery of internal documents and what are believed to be audio recordings of such negotiations.
In a rare move, Sagawa had not yet held an inauguration press conference since assuming the post of National Tax Agency head last July, apparently for fear of being grilled over the Moritomo Gakuen issue.
The revelation of the male finance ministry official's suicide comes at a time when opposition parties are stepping up their offensive against the government after The Asahi Shimbun reported March 2 that relevant Finance Ministry documents had been doctored.
But it is unclear whether the official's death is related to the land sale controversy. The official had been frequently absent from work due to poor health since last fall and had not been questioned by prosecutors investigating the case, sources close to him said.
The official in the ministry's Kinki regional bureau was found dead Wednesday at his home in Kobe, along with a suicide note, police sources said.
The official had worked in the department in charge of the land transaction in February last year when questions began to be asked about the heavily discounted sale of state land.
When asked about the link between the official's suicide and the allegedly doctored documents, Aso said, "We can't say anything because the official has passed away."
Freelance journalist Akihiro Otani said he believes the official's suicide and Sagawa's resignation are telltale signs of misconduct at the ministry.
"If there had been no misconduct, no official would have committed suicide or resigned," he said, adding Sagawa was probably made to resign before he would be summoned to the Diet as a sworn witness.
An 8,770-square-meter plot in Toyonaka, Osaka Prefecture, was sold to Moritomo Gakuen in June 2016 for about 134 million yen ($1.26 million) to build a new elementary school, far below its appraised value of 956 million yen.
The ministry has said the heavily discounted sales price was due to the cost of removing buried waste at the site. But the Board of Audit of Japan said in November the discount happened because the price was not properly calculated.
Government officials are suspected of having reduced the price as the prime minister's wife Akie Abe was briefly appointed as the honorary principal of the planned school.
Following The Asahi Shimbun report, the opposition camp demanded that the ministry submit the original documents, which the Asahi reported had been doctored.
But on Thursday the ministry released what are essentially the same documents as previously disclosed to lawmakers, and refused to clarify whether they have been revised as reported, citing a continuing internal probe.
Moritomo Gakuen, headed by Yasunori Kagoike, had also sought donations while referring to the school as the "elementary school in honor of Shinzo Abe," prompting the premier to lodge a protest for using his name without permission.
The Moritomo scandal pushed Abe's Cabinet approval ratings down sharply last summer, leading to his Liberal Democratic Party's historic defeat in the Tokyo metropolitan assembly election.
Kagoike and his wife Junko have been indicted on unrelated subsidy fraud charges.