Financial Services Minister Hakuo Yanagisawa said Tuesday he is seeking reports from four pro-Pyongyang credit unions to be created to take over six failed ones, on their relations with the pro-Pyongyang General Association of Korean Residents in Japan (Chongryon).

"We are asking them to report to us on whether there is any evidence that runs counter to their corporate charter," Yanagisawa told a news conference.

The four credit unions, or "chogin," are required to adopt a corporate charter that pledges to sever ties with Chongryon before they receive the Japanese government's financial help in taking over the failed chogin, which are at the center of allegations of fund diversions to North Korea.

The Financial Services Agency suspects that Chongryon used the chogin to channel money to North Korea through means such as opening bogus deposit accounts.

FSA investigators say they have uncovered numerous fictitious deposit accounts suspected of having been used to divert funds to North Korea.

Yanagisawa said the government will make the decision on financial help after it sees the reports from the chogin.

On Nov. 28, police arrested former Chongryon executive Kang Young Kwan on suspicion he instructed top officials of Chogin Tokyo Credit Union to embezzle 830 million yen of the union's funds.

The scandals involving chogin originated at Chogin Kinki Credit Union, which was formed in 1997 through the merger of five similar credit unions in the Kansai region.

In 1998, the state-run Deposit Insurance Corp. pumped 310 billion yen into Chogin Kinki to enable it to take over the operations of another failed credit union in Osaka and assume the duty of refunding depositors on demand.

But Chogin Kinki failed in 2000 with a negative net worth. Investigators subsequently charged executives at the union with alleged involvement in the redirection of funds.