OSAKA -- Asahi Juken, a real estate company whose president and three other executives were arrested Tuesday on suspicion of defrauding 600 million yen from creditors, had other realtors mediate in its property deals and divert about 1 billion yen of their commission to its group companies, police sources said April 29.

The company, a major borrower from bankrupt "jusen" housing mortgage companies, is suspected of raising about 10 billion yen by hiding part of mortgaged property sales earnings and spending it as its operational fund. Police were grilling Kizo Matsumoto, 62, Asahi Juken president, and other executives under arrest in connection with the alleged concealment of property sales mediation commissions, the sources said.

According to police probes, Asahi Juken began selling mortgaged properties after the bubble economy burst. It is suspected of raising secret earnings by forging sales contracts or overestimating expenses for property sales, the sources said.

Apart from this, the company had other realtors mediate in property sales even when unnecessary and one time paid them 3 percent of the sales amounts as mediation commissions, the sources said. Asahi Juken later had the mediators divert 2 percent of these amounts to group companies, they said. By sending receipts for 3 percent of the sales amounts to creditors as expenses for the property deals, the company reduced its loan repayment amounts by that much, the sources said.