Photo/Illutration Tadao Inoguchi, right in back row, a Nihon University board member, and Masami Yabumoto, left in back row, former board chairman of the medical corporation Kinshukai, with Hidetoshi Tanaka, chairman of the university’s board of directors (From Nihon University’s website)

Tokyo prosecutors on Oct. 7 arrested a Nihon University board member and a former medical corporation chairman on suspicion of breach of trust over money transfers stemming from a reconstruction project for the school’s hospital.

The Tokyo District Public Prosecutors Office suspects that board member Tadao Inoguchi, 64, and Masami Yabumoto, 61, former chief of Osaka-based Kinshukai, caused 220 million yen ($1.97 million) in financial damage to the university.

They denied the allegations during voluntary questioning by investigators, sources said.

Inoguchi is a close aide of Hidetoshi Tanaka, chairman of the university’s board of directors.

In December 2019, Nihon University subcontracted a subsidiary to choose a company to design and manage reconstruction of Nihon University Itabashi Hospital in Tokyo’s Itabashi Ward.

Inoguchi is a board director of the subsidiary, Nihon University Enterprise Co., based in Tokyo’s Setagaya Ward.

Nihon University Enterprise selected a Tokyo design office from among four candidates.

The university in April 2020 awarded a contract worth 2.44 billion yen to the design office, based on the cost estimate provided by the subsidiary.

The university paid about 730 million yen of the amount to the design office in July 2020.

The following month, the design office transferred about 220 million yen of the payment to a dummy company established by Yabumoto.

Investigators suspect Inoguchi directed the cash transfer, which was labeled as a consultation fee. They believe Yabumoto was a conspirator in the case.

In September 2020, a company linked to Kinshukai, a major medical corporation group in the Kansai region, transferred 66 million yen to a consulting company connected to Inoguchi’s acquaintance.

From that cash, 30 million yen was transferred to another company linked to the acquaintance.

The acquaintance in March and June this year handed Inoguchi a total of 25 million yen from that amount, investigators said.

Inoguchi came under fire when he was an assistant coach of the university’s American football team. He reportedly told the players to keep quiet about a vicious late hit on an opposing team’s quarterback in 2018.

In July that year, Inoguchi stepped down from the university’s board and as project planning director at Nihon University Enterprise.

But in December 2019, he became a board director of Nihon University Enterprise, and he returned to the university’s board in September 2020.

Yabumoto and Tanaka both served as vice chairman of the Japan Sumo Federation, which supervises amateur sumo wrestling.

Yabumoto is also said to be close to Inoguchi.

Investigators searched the university’s head office, the subsidiary, Tanaka’s home and office, a company related to Kinshukai, and elsewhere on Sept. 8 and 9.

Yabumoto resigned as chairman of the Kinshukai group on Sept. 17.

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