April 21, 2017 1:46 pm JST

Japan's scandal-mired school applies for bankruptcy protection: source

OSAKA (Kyodo) -- A scandal-mired Osaka school operator at the center of political scrutiny applied Friday for protection from its creditors through court-mediated rehabilitation, a source close to the matter said.

Links between the nationalism-espousing operator, Moritomo Gakuen, and Prime Minister Shinzo Abe and his wife have been probed in recent months following Moritomo Gakuen's acquisition of a piece of state-owned land last year after the price of the land was dramatically reduced.

The school will try to rebuild its finances after taking on weighty debts connected with the elementary school it had hoped to open this month on the land in Toyonaka, Osaka Prefecture.

The school buildings stand empty after prefectural authorities refused in March to grant Moritomo Gakuen accreditation.

The construction company contracted to build the school said Moritomo Gakuen still owes it more than 1.6 billion yen ($15 million). Construction costs had been set at around 1.55 billion yen but spiraled to around 2 billion yen, according to the company.

The Osaka District Court, which will handle the bankruptcy protection procedure, has already given provisional approval for the garnishing of land and buildings of a Moritomo Gakuen-operated kindergarten and the home of the operator's chief, Yasunori Kagoike, to pay the debt to the construction company.

Kagoike gave sworn testimony last month before committees in the Diet, in which he said his relationship with the Abes included receipt of a 1 million yen donation to help build the now-shuttered elementary school.

The Abes have repeatedly denied involvement in the land deal.

Kagoike has said he does not believe the Abes were directly involved in getting the price of the land lowered, but suspects someone else may have intervened with their interests in mind.

Moritomo Gakuen's teaching philosophy has also come under scrutiny. The kindergarten it runs is known for making its pupils memorize the Imperial Rescript on Education, an 1890 edict that was later used to promote militaristic and emperor-oriented education.

Prefectural officials questioned Kagoike and his wife, the principal of the kindergarten, over suspected hate speech in January after parents were given material disparaging Korean residents of Japan and Chinese people.

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