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2ND LD: Prosecutors quiz defense contractor with ties to ex-vice minister+(Japan Economic Newswire Via Thomson Dialog NewsEdge) TOKYO, Oct. 19_(Kyodo) _ (EDS: ADDING INFO IN 5TH GRAF) Prosecutors began questioning a former senior managing director of Tokyo-based defense contractor Yamada Corp. on suspicion of causing losses to the company by cooking its books to build a slush fund, sources close to the case said Friday. The 69-year-old former executive is believed to have had close ties with defense bureaucrats and lawmakers influential in forming defense policy, including former Vice Defense Minister Takemasa Moriya, they said, adding the former executive and Moriya were golfing partners. Moriya, 63, allegedly played golf with the former executive several times while serving as vice defense minister from August 2003 to August 2007, possibly in violation of a Defense Ministry rule on ethical conduct regarding people that have interests connected to the ministry. Moriya reportedly said he had played golf before the rule came into force in April 2000 with the former executive of Yamada, a trading house specializing in defense and aviation equipment. Including occasions during the period he was in the post of vice defense minister, Moriya and the former executive played golf together more than 100 times, and also played mah-jong and wined and dined together, the sources said. Moriya said at a press conference in late August, commenting on an allegation regarding his involvement in golf-related collusion, "I have never exercised my authority for any particular person." Defense Minister Shigeru Ishiba indicated Friday that he will try to question Moriya directly over the golfing allegation. "If the allegation is true...I personally think it would affect the whole authority of the Defense Ministry," Ishiba said. Ishiba also voiced concern that the allegation involving Moriya and Yamada Corp. could affect ongoing parliamentary deliberations on a bill to continue Japan's refueling mission in the Indian Ocean. "I can't say there will be no impact in terms of the credibility of the defense administration," Ishiba said. The scandal prompted the main opposition Democratic Party of Japan on Friday to renew its call for Moriya, a former top bureaucrat of the ministry, to be summoned to a session of the House of Councillors Committee on Foreign Affairs and Defense as a sworn witness. DPJ lawmaker Shu Watanabe also told a session of the House of Representatives Committee on Security, "We want Mr. Moriya to come to this committee if necessary for intensive deliberations" on the allegation. The former executive is suspected of having being involved in alleged accounting irregularities, such as moving money off balance sheets by using firms including Yamada's subsidiary in the United States, before he left the company in July last year, the sources said. The special investigation squad of the Tokyo District Public Prosecutors Office believes the practice constitutes a breach of trust, the sources said. The sources said the former executive is suspected of rewriting a contract with a U.S. business partner in July last year, after his retirement, in a way that put Yamada at a disadvantage, even though he had no proper in-house authority, the sources said. The former executive led the management and operation of Yamada, which was established in 1969, and left the company in June last year following an argument with the company's owner over business strategy. In September last year, the former executive launched a defense and aerospace company, Nihon Mirise Corp., in Tokyo, and more than 20 of his former subordinates left Yamada and joined Nihon Mirise. This led Yamada to file a 1.5 billion yen lawsuit for damages with the Tokyo District Court. Many of the workers who left Yamada to join Nihon Mirise were sales representatives in charge of jet engines manufactured by General Electric Co. Yamada holds the right to sell GE engines in Japan, which will be used in the Air Self-Defense Force's next-generation CX transport aircraft. Nihon Mirise also lodged a lawsuit against Yamada, demanding payment for the workers' retirement allowances. Regulations on the ethical conduct of members of the Self-Defense Forces call for a salary cut or reprimand if a member is found to have played golf with a contractor or other person with a vested interest even if the member bore the expenses. Moriya resigned as vice defense chief at the end of August, ending his comparatively long stint in the post of just over four years, after reportedly disagreeing with then Defense Minister Yuriko Koike over the appointment of his successor. Copyright 2007 Kyodo News International, Inc. |