The decision was issued by the Tokyo District Court under the Law on Religious Organizations which allows a court to dissolve a religious group that commits illegal acts that damage the public interest. It deprives the cult of tax breaks and financial privileges associated with its religious status.
The court can also appoint a financial administrator to liquidate the group's property, assets and business operations. The Asahi Evening News newspaper said the cult owned 30 properties and companies throughout Japan worth 2 billion yen ($20 million).
The newspaper said if the Tokyo court's decision was upheld, Prime Minister Tomiichi Murayama's government may decide to ban the sect completely under the Subversive Activities Prevention Law.
Under the present ruling, supporters may continue to follow sect beliefs but only as individuals under constitutional guarantees of personal religious freedom.
A total of 11 people died and about 4,000 were made ill in the March 20 subway gas attack. The sect's leader, Shoko Asahara, is awaiting trial on murder charges.
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