Updated: 12/19/2013 01:24 | By Agence France-Presse

'Tokyo governor to resign over loans scandal'

Embattled Tokyo governor Naoki Inose is set to announce his resignation over a loans scandal linked to his election campaign, Japanese media said Wednesday.


'Tokyo governor to resign over loans scandal'

Tokyo Governor Naoki Inose speaks during a press conference at the Tokyo metropolitan government office on November 26, 2013

Inose, who is credited for bringing the 2020 Olympics to the capital, will announce at a press conference Thursday that he is quitting his post, Kyodo news agency reported citing members of Tokyo's metropolitan assembly.

In November Inose admitted he received 50 million yen ($500,000) from the political family behind the medical group Tokushuka before running in last year's gubernatorial election.

He failed to declare the sum in campaign accounts, but denied the money formed a slush fund.

The governor's expected resignation after only a year in the role comes amid mounting pressure for him to step down from the metropolitan assembly and Japan's central government, Kyodo said.

Japanese Prime Minister Shinzo Abe is keen to resolve the issue "as soon as possible" to prevent the scandal from hampering preparations for the Olympic Games, Kyodo reported Wednesday, citing an Abe aide.

Under the Japanese election law, campaign treasurers must report all income, such as donations, related to electioneering. 

Those who violate the law could face prison terms of up to three years or fines of up to 500,000 yen.

Inose told reporters last month that the money was a personal "loan" and did not constitute election campaign funds.

"The fact that (Inose) received a large sum of money from someone who does business related to his authority (to approve hospital openings) is enough to warrant his resignation," Masahiko Komura, deputy head of the ruling Liberal Democratic Party, told reporters Wednesday, according to Kyodo.

"If he delays his decision, Tokyo's preparations for the 2020 Olympics will be affected," Komura said.

Inose said in November that he was offered the money by the Tokudas, the family running Tokushukai, and that he felt "it would be rude to refuse when (the money was) offered".

But public broadcaster NHK reported that it was Inose himself who reached out to the Tokuda family and asked for 100 million yen before the election.

Prosecutors have investigated the Tokushukai group, which runs dozens of major hospitals throughout the nation, over an allegation of illegal electioneering practice, including providing money to campaign workers, at the time the younger Tokuda ran for the lower house.

Inose said he paid back the "loan" after the investigation surfaced in September.

He said he was only able to return the money after the probe because he had been busy running Tokyo's bid to host the 2020 Olympics, and attending to his wife, who was hospitalised.

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