SAKAI, Osaka -- Electronics giant Sharp Corp. was warned that it was using a yakuza-linked construction company in the construction of a new LCD panel factory it is building here, it was learned.

Terrified Osaka Prefectural Government officials warned Sharp that Daiwa Juki, the Osaka-based construction machinery leasing company working as a sub-contractor on the factory project, had close links to organized crime.

General contractor Shimizu Corp., which palmed out the job to Daiwa, is poised to stop offering the company further work.

In April 2006, Osaka created prefectural guidelines that aimed to prevent organized crime from taking part in public projects. But in August 2006, the prefectural government received reports that the president of Daiwa had played golf on several occasions with the head of the Yamaguchi-gumi, Japan's largest organized crime syndicate.

Osaka responded by issuing a directive to 23 general contractors not to sub-contract work for public projects to Daiwa.

Prefectural government officials said they received a report in December that Daiwa was working on Sharp's Sakai plant construction project. Even though the job is not a public project, the prefecture plans to give it 15 billion yen in subsidies, so it decided to inform Sharp about the company's mob ties.

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