North Korea Group in Japan Is Ordered to Pay Loans

Bloomberg (Hat Tip One Free Korea)
Saori Kuji

The de facto embassy of North Korea in Japan may lose its headquarters after a Tokyo court ordered it to pay 62.7 billion yen ($508 million) to a government-run bad loan agency to cover unpaid debt.

The Tokyo District Court today ruled the General Association of Korean Residents in Japan must repay the government-run Resolution and Collection Corp., which took over non-performing loans advanced by credit companies associated with the pro-Pyongyang group. The court ruled the RCC can seize the group’s headquarters in central Tokyo in lieu of payment.

“This is clearly a huge blow for the organization,” Motoi Tamaki, chief director at Tokyo’s Modern Korea Institute, said. “The group is one step away from complete dissolution.”

The association represents about 50,000 North Koreans who live in Japan and acts as a representative for North Korea, which has no formal ties with the Japanese government. The group has channeled funds to the reclusive regime in North Korea, according to members.

The RCC told the court the funds were a portion of loans extended by now-collapsed credit unions, or Chogin, that were associated with Chongryon, which is liable for the debt because it received the money.

“Public funds were pumped into the fallen credit unions. It is entirely reasonable for the RCC to try to collect the money,” Prime Minister Shinzo Abe said in a comment on today’s court ruling.

Collapsed Deal

Chongryon made headlines last week when it emerged that a former head of Japan’s domestic spy agency signed a contract to buy the group’s headquarters in central Tokyo. The deal collapsed because of the RCC legal action and because the former official, Shigetake Ogata, wasn’t able to raise the funds.

Ogata said he set up an investment company called Harvest to buy the property to help Chongryon, which is called Chosensoren in Japanese.

“The ruling puts pressure on resident North Koreans and this is what I was afraid of,” Ogata said at a press conference today. “This ruling will be conveyed to North Korea and there will be retaliation against Japan which is not good for Japan’s national interest.”

North Korea test fired a long-range missile over Japan in 1998 and last year tested a nuclear device and other missiles, raising tensions in North Asia. The issue of Japanese citizens kidnapped by North Korean agents in the 1970s and 1980s is also impeding attempts to normalize ties.

Channeling Funds

Japanese prosecutors raided Ogata’s home in connection with the attempted purchase, Asahi newspaper reported on June 14. Prime Minister Shinzo Abe and Toshio Yanagi, director general of Japan’s Public Security Intelligence Agency, criticized the former spy head’s action.

“I cannot say much about it since the issue is still under investigation,” Ogata said.

Chongryon, founded in 1947, was set up to represent the interests of North Koreans resident in Japan and many of them donated money and goods to the organization and schools run by the group.

Some of the funds were funneled to the Stalinist regime in North Korea, which regularly criticizes Japan.

“I realized that Chosensoren was just a slave of Pyongyang and they didn’t help us at all,” Kim Jong Il who changed his citizenship to the South 10 years ago said. Kim is no relation to the North Korean leader Kim Jong Il. “They spied on us and took our money to support Pyongyang. We observe this court ruling with disgust.”


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