Tokyo prosecutors have arrested a board member of one of Japan's biggest universities for allegedly causing losses of about 2 million dollars in connection with a contract to rebuild a hospital.
Nihon University board member Inoguchi Tadao was arrested on Thursday along with Yabumoto Masami, a former board chairman of the medical corporation Kinshukai, on suspicion of breach of trust.
Prosecutors suspect that Inoguchi instructed a design firm last year to send two million dollars to a company owned by Yabumoto for non-existent consultation fees.
The design firm had contracted work to rebuild the university's hospital in Tokyo's Itabashi Ward for over 21 million dollars.
Inoguchi also sits on the board of Nihon University Enterprise Company, a subsidiary set up to manage the university's facilities.
Sources say Inoguchi was the point of contact for contracts related to the rebuilding project, and the 2 million dollars in question was initially supposed to be paid to the Nihon University Enterprise Company.
But Inoguchi allegedly instructed the design firm to pay the money to the company owned by Yabumoto instead.
Kinshukai, which was chaired by Yabumoto, operates seven hospitals, mainly in Osaka. It is one of the biggest medical corporations in western Japan.
Prosecutors in September raided the offices of Nihon University and a group company of Kinshukai.
Sources say Inoguchi denied involvement in any wrongdoing during voluntary questioning by prosecutors before his arrest.
Nihon University released a comment, saying it deeply apologizes to the students, their parents, graduates, teachers and other staff for causing worry and inconvenience.
The university says it will continue to fully cooperate with the ongoing investigation.
Nihon University has over 73,000 students, more than any other university in Japan. It also has four hospitals affiliated with its School of Medicine and its School of Dentistry.