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Thursday, 29 November, 2001, 12:10 GMT
Tokyo police raid N Korea HQ
North Koreans protest against the police raid
About 400 protesters scuffled with police
By the BBC's Charles Scanlon in Tokyo

Japanese police have raided the Tokyo headquarters of the North Korean Residents' Association, which serves as an unofficial representative office for North Korea.

The police searched the offices of the association, called the Chosen Soren, as part of an investigation into alleged embezzlement by one of the association's senior officials.

The suspect, Kang Young-kwan, was arrested on Wednesday on suspicion that he diverted about $6.5m from a failed financial institution serving Korean residents in Japan.

There were scuffles outside the building, as about 400 Korean protesters gathered to denounce what they described as racial discrimination.

Murky finances

For years, there have been reports of murky financial dealings by which funds from Korean residents in Japan are channelled to the Stalinist regime in North Korea.

The Chosen Soren HQ
The Chosen Soren HQ unofficially represents about 200,000 people in Japan
The Japanese police have now launched an investigation that could shed some light on the activities of a highly secretive organisation.

The charge against Mr Kang relates to the collapse of a credit union, or small bank for Korean residents in Japan. The police say it was effectively controlled by the Chosen Soren, and that Mr Kwan gave orders to its directors to embezzle the funds.

Japan and North Korea have no diplomatic relations, and talks to establish ties are currently stalled.

The Chosen Soren has served as the communist state's de-facto mission in Tokyo.

There are about 700,000 Korean residents in Japan, with about one third professing allegiance to North Korea.

See also:

21 Aug 01 | Asia-Pacific
N Korea faces desperate future
04 Sep 01 | Asia-Pacific
China steps into Korean debate
01 Sep 01 | From Our Own Correspondent
Life in the secret state
06 Jun 01 | Asia-Pacific
S Korea calls for new summit
08 Mar 01 | Asia-Pacific
Bush rules out North Korea talks
13 Oct 00 | Asia-Pacific
Kim Dae-jung: Korean peacemaker
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