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

Tokyo-based Nihon University, its reputation reeling from a scandal involving alleged tax evasion and kickbacks, released a report Dec. 13 that found no evidence of breach of trust involving the disgraced former chairman, Hidetoshi Tanaka, with regard to a reconstruction project for the university hospital.

The report by lawyers and other parties determined that only Tadao Inoguchi, a former board member indicted on breach of trust charges, understood the system that siphoned kickbacks totaling 220 million yen ($1.9 million) from a Tokyo design office.

Inoguchi, who is 64, and Masami Yabumoto, 61, a former chairman of Osaka-based Kinshukai, a major medical corporation, were arrested and indicted in connection with breach of trust involving Nihon University Itabashi Hospital.

Prosecutors contend that they were involved in choosing the design office to oversee the project and procuring medical equipment.

The interim report dealt only with the reconstruction case. It did not concern itself with the procurement case and Tanaka’s tax evasion arrest. Tanaka, 75, was arrested on suspicion of violating the income tax law.

The 220 million yen is believed to have been transferred to a dummy company established by Yabumoto from the Tokyo design office in August 2020.

The report concluded that Inoguchi, in his position as a board director of Nihon University Enterprise Co., the university’s subsidiary, acted illegally by assuming sole control in the tender process that ensured the design office won the contract.

According to the report, he made the design office pay a hefty kickback. He was quoted as telling an executive of the design office, “This company (Yabumoto’s company) and the subsidiary are effectively the same.” Nobody else associated with the university was aware of such exchanges, the report said.

The design office executive told investigators: “I thought we might lose the contract if we ignored the subsidiary. I thought we could still make a profit by shrinking personnel costs even if we paid kickbacks.”

The report found that Tanaka was not privy to the skulduggery with regard to “the bidder evaluation manipulation and kickbacks” and there was no evidence of “his direct violation of (his) obligations” over the choice of the design office.

On the question of whether any of the 220 million yen filtered back to Tanaka, the report withheld comment on grounds the matter is under official investigation.

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