Oct. 23--TOKYO -- Nishimatsu Construction Co. agreed Friday with five Chinese victims of forced labor during World War II to set up a 250 million yen trust fund to redress not only the five but also their 360 former coworkers.

The two former, along with relatives of three deceased, forced laborers lost a lawsuit seeking 5.5 million yen in damages each in 2007. But the Japanese construction contractor voluntarily made the compensation offer, trying to go over past problems after a recent political funds scandal.

Subject to the fund's coverage are Chinese people taken in 1944 and forced to work at a construction site for a hydroelectric power plant in Akiota, Hiroshima Prefecture, who were returned to China at the end of the war in 1945.

Nishimatsu is also expected to apologize to them.

The settlement took place Friday at the Tokyo Summary Court.

The plaintiffs who sued Nishimatsu in 1998 lost at the Hiroshima District Court in 2002 but won a reversal at the Hiroshima High Court in 2004. The Supreme Court dismissed their claims in 2007, but called for an effort to redress the victims.

In handing down the ruling, the top court determined for the first time that the right of individual Chinese to seek war reparations from Japan was abandoned under the 1972 Japan-China Joint Communique, by which the two countries reestablished diplomatic ties.

Among a spate of lawsuits filed in Japan since the 1990s by victims of Japan's wartime aggression, another Japanese contractor, Kajima Corp., has also set up a fund to compensate victims of forced labor near the then Hanaoka copper mine in Akita Prefecture.

Embroiled in the political funds scandal this year, Nishimatsu has sued its former president, Mikio Kunisawa, and former vice president, Keiji Fujimaki, both convicted over the scandal, for causing losses to the firm through illegal donations using dummy entities with backdoor money illicitly brought from overseas.

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