TOKYO (REUTERS) - Japanese prosecutors on Monday (July 31) arrested the former head of a school operator with ties to Akie Abe, the wife of Prime Minister Shinzo Abe, on suspicion of illegally receiving subsidies, media said, reviving a months-old scandal.
Abe's public support is crumbling, hit by scandals over suspected cronyism, a defence ministry cover-up that forced the resignation of his protege, former defence minister Tomomi Inada, and voter perceptions of his growing arrogance.
Prosecutors in the western city of Osaka arrested Yasunori Kagoike, former chief of educational institution Moritomo Gakuen, and his wife, Junko, for fraudulently receiving state subsidies to build an elementary school, Kyodo news agency said.
In applying for the subsidies, Moritomo Gakuen submitted a document showing building costs of 2.38 billion yen (US$22 million), but the figure was suspected to have been padded to attract greater subsidies, Kyodo quoted unnamed investigative sources as saying.
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Before his arrest, Kagoike had denied any wrongdoing, the agency added.
Reuters could not reach Kagoike and his wife to seek comment. Efforts to reach their lawyers were unsuccessful.
Officials of the public prosecutors' office in Osaka were not immediately available to comment.
Besides the subsidies, opposition parties raised questions about Moritomo Gakuen's purchase of land for the new school, whose honorary principal Akie Abe had been set to have become.
The operator bought state-owned land for just 14 per cent of the appraisal price, Finance Ministry data showed, a discount officials have said was intended to account for cleanup costs.
Abe has said neither he nor his wife intervened in the land deal or helped the school get accredited.
Akie cut ties with the elementary school after the scandal broke earlier this year.
In another scandal, Abe has repeatedly denied having done any favours to help a friend, Kotaro Kake, the director of educational institution Kake Gakuen, win approval for a veterinary school in a special economic zone.