Chongryun Tokyo HQ sale seems set to fail

The deal to sell the Tokyo headquarters of Chongryun to Harvest, an investment advisory firm headed by an ex-chief of the Public Security Intelligence Agency, will probably fail because the buyer can't get the money to buy the pro-Pyongyang group's premises, sources said Wednesday.

Harvest, whose president is Shigetake Ogata, former agency director general, is having trouble raising the funds to buy the 2,390 sq. meters of land and 10-story office building belonging to the General Association of Korean Residents in Japan after the deal was revealed, the sources said.

The Public Security Intelligence Agency monitors groups for subversive activities, including Chongryun and Aum Shinrikyo.

"It's a serious problem that could damage public trust in our agency . . . I sincerely apologize for causing trouble," Toshio Yanagi, current agency director general, told a panel of the Liberal Democratic Party's panel on judicial affairs.

Ogata told a news conference that several investors have become hesitant about financing the purchase, which he said was for 3.5 billion yen, since the deal was reported in the media.

However, Ogata said the deal must be finalized before a court decision Monday in a lawsuit in which the state-backed Resolution and Collection Corp. has sued Chongryun for repayment of loans linked to nonperforming loans the corporation took over from 16 failed credit associations. It says 62.8 billion yen in loans were effectively lent to the group.

"Chongryun will be ousted from the head office if it loses the suit and the court seizes the property to put up for auction later, and that will hamper its role of supporting Korean residents in Japan," Ogata said.

The former security agency chief said he made the deal so he could help keep Chongryun operations going and guarantee that its affiliates' rights are protected.

"I also think the deal serves Japan's national interests," Ogata said.

Chongryun is North Korea's only representation in Japan and its headquarters is considered the de facto embassy. Evicting Chongryun could draw a harsh reaction from Pyongyang and damage already fragile bilateral relations.

Ogata said he believed Chongryun would use the 3.5 billion yen to pay for the loans, which would stop the court from seizing the property.

The deal for the land and the building Tokyo's Chiyoda Ward was signed earlier this year, and ownership listed in the public property registry was changed June 7, Ogata said.

Chongryun has agreed to pay Harvest, located in Tokyo's Meguro Ward, 350 million yen a year to lease the building and has the right for five years to repurchase the property.

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