Three people, including a former president and a former managing director of a Nihon Keizai Shimbun Inc. affiliate, were arrested Sunday for alleged aggravated breach of trust by issuing checks for nonexistent transactions.

The Tokyo District Public Prosecutor's Office arrested Koichi Shimada, 62, Hideo Ogawa, 60, and Yoshiyuki Ishikawa, 56, on suspicion of violating the Commercial Code. Shimada is a former president of TC Works, an event planning and interior construction firm under the wing of the major business newspaper, while Ogawa is a former managing director. Ishikawa was a section chief.

Investigators said they suspect the three had been fiddling with the firm's books to make it appear it was doing well. Then, finding themselves short of operating funds, they issued checks for bogus transactions and cashed them, police alleged, adding some 4.3 billion yen worth of such checks may have been issued in this fashion.

The daily had filed a criminal complaint, alleging the suspects conspired to fabricate transactions and issue checks on the pretext of securing cash to pay for them.

According to the criminal complaint, the suspects between January and August 2001 made it seem as though some interior work TC Works was contracted to do for a construction firm in Tokyo was subcontracted to another construction company. They then allegedly had TC Works issue checks worth some 1.6 billion yen in total and cashed them.