Defense Agency chief Fukushiro Nukaga apologized to the Diet Friday over a recent scandal in which the agency is accused of having systematically destroyed public documents to cover up a procurement-related scandal.

"It is extremely regrettable that the agency has lost credibility with the people (due to the incident)," Nukaga said during a plenary session of the Lower House. "We offer our sincere apology to the public." Nukaga promised that the agency will carry out a thorough investigation into allegations it tried to cover up fraud involving its Central Procurement Office. "If the allegations that the agency systematically destroyed evidence are true, it is an extremely serious problem. The agency will display its self-cleansing power and get to the bottom of the matter," Nukaga added.

Nukaga, however, rebutted opposition party demands that he step down, saying that it is not the time for him to resign but rather concentrate on fact-finding efforts related to the scandal and alleged coverup. Nukaga said the agency's in-house investigation panel is questioning 85 agency officials about whether they incinerated or tried to hide procurement papers before the first raid.

Prosecutors suspect that Toyo Communication Equipment Co., a defense contractor that overcharged the agency by 2.56 billion yen, was granted a two-thirds reduction in the amount to be refunded in return for agreeing to hire a retiring agency official. They also allege that senior officials had ordered a number of documents to be removed or destroyed before the agency was first raided by investigators Sept. 3.

On Thursday, Masayuki Fujishima, director of the Secretariat of the agency, said the agency will ask Toyo Communication to repay about 1.7 billion yen to state coffers, the amount of the "discount" given Toyo by the procurement office.