Mortgage broker license

OSAKA, Nov. 19 Kyodo

A failed Osaka-based finance company where a number of officials were arrested on suspicion of defrauding customers sent a total of 1.8 million yen to a bank account of a secretary to a ruling party lawmaker who was a Finance Ministry bureaucrat, sources familiar with the case said Sunday.

The company, Daiwa Toshi Kanzai, which was selling mortgage-backed securities, sent in monthly installments from summer last year until this spring to a bank account under the name of a female secretary to Takanori Sakai of the Liberal Democratic Party, the sources said.

Sakai, a House of Representative member from Saga Prefecture, southwestern Japan, is already known to have telephoned executives of the Finance Ministry's regional bureau while the bureau was engaged in the inspection of Daiwa Toshi Kanzai last year and early this year.

This is the first revelation of a possible ''money'' link between Sakai's staff and the Osaka company.

The Finance Ministry started inspecting the company in July last year and withheld renewal of a marketing license for mortgage securities in December. The company collapsed this April.

Sakai, through a secretary, said he is ''unaware'' of the money transferred to the account, and denied any link with Hiroshi Toyonaga, former president of Daiwa Toshi Kanzai, who was arrested Nov. 6.

Toyonaga, 65, and 18 others were arrested the same day on suspicion of defrauding about 17,000 clients throughout the country out of about 1.1 billion yen through dubious financial schemes. Toyonaga has denied the allegation.