The Tokyo District Court on Tuesday suspended any transactions related to the property, which was then seized. It seems likely that the auction will go ahead soon, which would presumably force Chongryon to further scale back its activities in Japan.

The district court on June 18 ordered the association to repay 62.7 billion yen to a creditor, the Resolution and Collection Corp., which is a debt collection firm affiliated with the Japanese government. The court also ordered a "provisional disposition" to enable the debt collector to effectively seize the Chongryon property before the court decision on the seizure.

Chongryon has reportedly decided to accept the court ruling. The association is unlikely to appeal the ruling because of the legal costs involved, with the deadline for the appeal set for July 2.

As soon as seizure proceedings are finished in a few days to cover Chongryon's debts, the head office land and building will be put up for auction. Auction proceedings usually take about six months to be completed.

When it learned earlier that it could lose the case, Chongryon, in a bid to prevent the property being seized, hastily transferred the property to an investment consulting firm led by a former head of the Public Security Intelligence Agency even before receiving payment. However, Chongryon eventually canceled the controversial deal when the unusual transaction became an issue.

The Resolution and Collection Corp. was set up to deal with insolvent bonds of Japanese financial institutions. It has so far taken over insolvent bonds of 16 Chongryon-affiliated credit unions that went bankrupt. The debt collection firm filed a suit in 2005 asking for repayment of the 62.7 billion yen loaned to Chongryon.

(englishnews@chosun.com )