This Oct. 7, 2021 photo shows headquarters of Nihon University in Tokyo. (Kyodo)

       TOKYO (Kyodo) -- An executive board member of one of Japan's largest universities was arrested Thursday for allegedly diverting 220 million yen ($1.97 million) from the educational institution to a dummy medical consultancy in connection with a project to rebuild a hospital affiliated with the university.

       Prosecutors arrested Tadao Inoguchi, the board member of Nihon University in Tokyo, for alleged breach of trust over his role in ensuring an architecture firm based in the capital secured the rebuilding contract. He is also suspected of directing the firm to send the 220 million yen to the dummy consultancy.

       The Tokyo District Public Prosecutors Office also arrested on the same charge Masami Yabumoto, the 61-year-old former head of Kinshukai, a medical corporation based in Osaka, western Japan.

       Yabumoto, who controls the dummy consultancy, is known to have ties with people in political and financial circles including former Prime Minister Shinzo Abe, with whom he played golf on several occasions.

       The architecture firm was chosen in a selection process spearheaded by Nihon University Enterprise Co. that is fully funded by the university and handles its procurement. Inoguchi, 64, is also a board member of Nihon University Enterprise.

       According to investigative sources, about 60 million yen was transferred from the dummy consultancy to a company associated with Inoguchi and over 20 million yen was passed on to him via a third company.

       Inoguchi has denied any wrongdoing during voluntary questioning, according to the prosecutors, while Yabumoto is believed to have denied involvement, the sources said.

       Last month, the prosecutors searched the headquarters of the university and Nihon University Enterprise as well as the home of Hidetoshi Tanaka, chairman of the university's board.

       Nihon University said on its website Thursday that the arrest of a member of its board was "extremely regrettable" and vowed to "fully cooperate with the investigation."

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