Japan's leaders demand answers on stock scandal


TOKYO -- Top finance officials and business leaders tripped over each other rushing to reverse field yesterday, demanding a public answer to the most obvious question about Japan's worst stock market scandal: Who got the $1 billion?

The rush to the side of openness, on the eve of a key parliamentary committee meeting to begin inquiries into the scandal, threw into pell-mell retreat the Tokyo power elite's monthlong drive to keep the public from knowing who are the few hundred favored clients.

The unnamed clients got tens of millions of dollars each in LTC "compensation" from Japan's "Big Four" brokerage houses for investment losses during last year's Tokyo Stock Exchange crash.

The scandal widened today when a Finance Ministry official said that six other brokerages provided $260 million to favored clients as compensation for losses, Reuters reported. The official did not name the firms or give any other details.

According to official figures, the total given to favorites by the 10 firms to cover losses now comes to $1.2 billion, Reuters said.

For most of this month, many of Japan's business leaders, politicians and bureaucrats have circled the wagons. They have sacrificed top executives of the Big Four in round after round of symbolic resignations and pay cuts -- a traditional way to try to head off further scrutiny in Japan -- but denounced the idea of making the lists public.

Naming names would be "unethical," several businessmen said. "It would cause confusion," politicians repeatedly intoned.

The lists of who got what are said to read like pages from a blue book ofJapan's leading corporations, semi-public funds, labor unions and other big-ticket investors.

Weeks of tension over how much may come out have kept trading on the Tokyo Stock Exchange at a virtual standstill, with prices deeply depressed all this month.

Rampant rumors and published speculation also have suggested that disclosure of the lists might lead to some unnamed key politicians.

Those reports have been fueled by the governing Liberal Democratic Party itself, which has dug in its heels and vowed not to let the parliamentary committee question several key witnesses.

But by Tuesday evening, some businessmen were admitting privately that they no longer saw any hope of keeping the lid on.

Yesterday afternoon came the first news that a full-scale retreat was beginning.

Japanese news articles reported that Nobuhiko Matsuno, the head bureaucrat at the embattled Securities Bureau, which tried last month to mollify critics of its regulatory role by ordering high-ranking pay cuts, had told LDP committees that he is urging securities companies to publish the lists voluntarily.

Hours later came reports that Ryutaro Hashimoto, the embattled finance minister and Mr. Matsuno's boss, who earlier this month tried to kiss off the scandal by taking a 10-percent cut in his $10,000-a-month pay, not only reversed previous stands and called for the lists to be disclosed but also made openness a theme in remarks on the scandal.

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