Former Nishimatsu Construction president Mikio Kunisawa, 70, was arrested for allegedly approving the transfer of a total 70 million yen (S$1.2 million) to Japan from Hong Kong and other countries without notifying customs.

Ex-vice president Keiji Fujimaki, 68, and three other former Nishimatsu officials were arrested a week ago on suspicion of bringing the money into Japan in 2006 and 2007 in violation of the foreign exchange control law.

Nishimatsu and a Thai firm were earlier reported to have given a total of 400 million yen in bribes to a Bangkok official to secure a contract to build a drainage system.

Media reports said the money had been accumulated for the purpose of paying bribes to land contracts in Japan and overseas.

Fujimaki was accused of issuing fictitious orders to firms in Southeast Asia to raise funds for bribes, the Yomiuri Shimbun reported earlier.

The company amassed one billion yen, which was mostly kept in foreign bank accounts, it said.

Japan has taken an increasingly hard line against corruption overseas.

Last month, Japan suspended loans to Vietnam, to which it is the largest donor, after former executives of Tokyo-based Pacific Consultants International admitted bribing a senior Vietnamese official. -- AFP