Photo/Illutration Naoto Kato, the new board chairman of Nihon University, speaks at a news conference in Tokyo on Dec. 10 about a series of scandals. (Asahi Shimbun file photo)

A government agency on Jan. 26 decided to withhold all fiscal 2021 subsidies from scandal-ridden Nihon University, a move that could cost the private school billions of yen in funds for several years.

The Promotion and Mutual Aid Corporation for Private Schools of Japan said it takes very seriously the financial scandals that led to the arrests of Hidetoshi Tanaka, the ousted board chairman at Nihon University, and a former university board member.

According to the agency’s guidelines on providing subsidies to private schools, funds are denied if school board executives or other leaders are arrested or indicted in serious criminal cases related to school management.

The guidelines state that the subsidies will also be withheld from such schools for the following fiscal year.

If the agency believes that the school has made efforts to improve management, the subsidies will be provided in the second year, but with a 75-percent reduction. For each of the following years, the reduction percentages could shrink by 25 percent.

Nihon University had received about 9 billion ($78 million) in subsidies for fiscal 2020, the second largest amount among private universities. The university is expected to recoup the original annual amount in subsidies in fiscal 2026 at the earliest.

“We accept and take seriously (the subsidy cancellation),” the university said on its official website on Jan. 26. “We will prevent a recurrence and improve (our management) by making good use of the proposals and results given by the internal team investigating (the scandals), the counsel to reform our university and the third-party panel.”

The university added that it will not raise tuition fees.

A former university board member was found to have been involved in a number of shady transfers of money that was supposed to have been used to rebuild the university’s hospital, investigative sources said. Tanaka is believed to have received some of these funds and was indicted on charges of concealing that money from tax authorities.

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