OSAKA -- K.S. Planning Co., a distributor of prepaid highway toll cards, asked the court Monday to dismiss a lawsuit filed by a toll card manufacturer over an unpaid debt, saying it had been fooled into a contract by one of its executives.

Nihon Hica Co., an affiliate of Japan Highway Public Corp., has sued K.S. Planning, a company owned by the wife of Upper House lawmaker Kunishige Kamamoto, for failing to pay a debt of 2.7 billion yen.

In the opening hearing at the Osaka District Court, K.S. Planning representatives said they had been fooled by former Nihon Hica executive Takeshi Matsumura into purchasing highway cards and that, therefore, the contract is void.

K.S. Planning maintains that Matsumura, who was arrested earlier this month for breach of trust, used K.S. Planning to cover losses from the illegal channeling of highway cards.

Nihon Hica sued K.S. Planning in August, after attempts at civil mediation that had begun in July 1997 broke down. Matsumura and other executives of Nihon Hica were arrested Sept. 1 on suspicion of aggravated breach of trust in connection with about 5 billion yen in losses the company suffered.

A special investigative squad of the Tokyo Public Prosecutor's Office said Matsumura and others delivered about 196,000 prepaid highway cards to K.S. Planning in 1995, although they had been aware that payments would not be made.