TOKYO (REUTERS) - The head of a Japanese school at the heart of a political scandal received a donation of one million yen (S$12,583 ) from Prime Minister Shinzo Abe's wife in 2015, he told parliament in sworn testimony on Thursday (March 23).
The crisis has chipped away at Abe's support and even weighed on Japanese shares on Thursday. But Abe has said neither he nor his wife Akie intervened in a sweetheart land deal in which educational group Moritomo Gakuen, based in Osaka, bought state-owned land at a fraction of its appraisal price to build an elementary school.
Abe has also denied allegations by Yasunori Kagoike, who has said he would step down as head of Moritomo Gakuen, that Akie had donated one million yen on the prime minister's behalf.
Akie had been set to be honorary principal of the school, which was to open in April with a curriculum based on pre-war patriotism that taught students to be subjects, not citizens. She cut her ties after the scandal broke. The group also runs a kindergarten with a similar curriculum.
Kagoike, in testimony to an upper house budget committee under oath - which means he could face perjury charges if he is later found to have lied - said that he had received money from Abe's wife in 2015 when the two of them were alone in a room at the school.
"She said 'please, this is from Shinzo Abe,' and gave me an envelope with one million yen in it," Kagoike said. "Abe's wife apparently says she doesn't remember this at all, but since this was a matter of honour to us, I remember it quite vividly."
The testimony was broadcast live on four of Japan's six television networks and Japan's Nikkei share index fell to a 1-1/2 month low in choppy trade as investors became cautious ahead of the testimony.
Kagoike is a member of Nippon Kaigi, a nationalist lobby group that promotes a traditional ethos mixing Shinto myth, patriotism and pride in an ancient imperial line. The group has close ties to Abe and his cabinet.
Abe's Liberal Democratic Party had resisted opposition calls for Kagoike to testify but agreed after he said Abe had donated money, calling the allegation an "insult" to the prime minister.
Abe's support fell 10 points to a still-robust 56 percent in a Yomiuri newspaper survey published this week, the biggest drop since he returned to office for a rare second term in December 2012.
Defence Minister Tomomi Inada, under fire for an unrelated possible cover-up at her ministry, has also been ensnared in the school scandal. She had denied appearing in court on Kagoike's behalf but had to correct her statement to parliament after court records showed she had. She said her memory was faulty.
Abe quit abruptly in 2007 after a year at the top plagued by scandals in his cabinet, an election drubbing and ill-health.
