Japan's ruling Liberal Democratic Party is to advise two heavyweights of its biggest faction to leave the party due to their roles in a political funds scandal that has rocked the party since late last year and plans to expel them if they do not comply, sources close to the matter said Tuesday.

The LDP, led by Prime Minister Fumio Kishida, is set to formally decide on the punishment of 39 members in total on Thursday, as some of its factions were found to have neglected to report portions of fundraising party revenue for years, with hundreds of millions of yen reimbursed to members.

Combined photo shows Ryu Shionoya (L) and Hiroshige Seko. (Kyodo)

Former education minister Ryu Shionoya, the de facto leader of the faction previously led by the late premier Shinzo Abe, and Hiroshige Seko, another Abe faction member and former LDP secretary general in the House of Councillors, will likely face the second-severest penalty in the party's eight levels of punitive steps following expulsion, the sources said.

The party is also considering punishing former trade minister Yasutoshi Nishimura and former LDP policy chief Hakubun Shimomura with suspension of their party membership, they said.

The move comes after the LDP leadership considered how the reimbursement scheme, which Abe decided to stop in April 2022, was reinstated after a gathering involving the four in August of that year, a month after Abe was assassinated.

On Monday, LDP Secretary General Toshimitsu Motegi said he requested a meeting of the party's ethics committee to officially decide on the punishment of the 39 incumbent and former lawmakers, most of whom failed to declare at least 5 million yen ($33,000) in their political fund's reports during five years through 2022.

But the list of those to be disciplined excluded Kishida and party heavyweight Toshihiro Nikai who has decided not to seek reelection as a lawmaker.

Kishida has said that he would not be subject to penalties given that his faction, unlike the Abe and Nikai groups, failed to properly report part of party revenue but did not pass back money to its members.

The Kishida, Abe and Nikai factions have decided to disband in the wake of the scandal.

About 40 other members who also underreported their political funds will not be examined by the ethics committee but will be issued "a warning" not to repeat such acts, according to Motegi.

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