MITI denies role in LNG plan linked to arrested oil trader
MITI denies role in LNG plan linked to arrested oil trader
TOKYO (AFP): A Japanese minister yesterday denied a report that an oil broker arrested for tax evasion last week urged the government to change plans for a liquefied natural gas (LNG) project in favor of the Mitsubishi group.
International Trade and Industry Minister Shinji Sato asserted that the municipal government in the northern city of Sendai had the right to decide how to implement the Malaysian LNG project and not the ministry in Tokyo.
"MITI (the ministry) could not have a role to play in the final decision," he said.
But Sato said the ministry would conduct an internal probe into alleged links between MITI officials and 60-year-old Osaka oil broker Junichi Izui, reversing earlier remarks that the ministry did not plan an investigation.
The Mainichi Shimbun reported earlier Friday that the Sendai municipal government gave up its original plan to ship LNG to the city after the ministry argued that building a pipeline would be cheaper.
But the ministry "suddenly changed its mind" in late 1991 and decided to go ahead with the original proposal to have the gas shipped to city, the newspaper said, adding that prosecutors were investigating Izui's possible role.
"Izui may have been involved in this project with the backing of his personal connections with politicians and bureaucrats," the Mainichi said.
The newspaper also noted that Tohoku Oil Co. Ltd., a Sendai- based unit of Mitsubishi Oil Co. Ltd., had since won a contract to build LNG storage tanks in the northern Japanese city at a cost of 39.3 billion yen (US$360 million). LNG shipments from Malaysia are expected to start in June next year.
The Mainichi reported earlier that Izui paid two billion yen in kickbacks to Mitsubishi Oil, although the company has denied he played any role in its bid to explore for oil in Vietnam in 1992. Sato has also dismissed the possibility of the ministry having a role in the contract.
Investigators have reportedly alleged that Izui donated millions of yen to a former trade minister and that names of MITI officials, as well as officials from other ministries, were found in a notebook he used for dinner schedules.
Among members of the new cabinet formed last week, Finance Minister Hiroshi Mitsuzuka's political faction and Health and Welfare Minister Junichiro Koizumi have admitted receiving donations from Izui. News reports say as many as 17 politicians received 52 million yen (US$470,000) over three years.
Prime Minister Ryutaro Hashimoto said Tuesday that he was not acquainted with Izui.
"As far as I know, there have been no donations. But just to make sure, I've asked for further checks to be made," he said.