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Government Opponent Quits in Japanese Trading Scandal

November 4, 1988

TOKYO (AP) _ An opposition lawmaker resigned Friday in a burgeoning stock scandal that reaches as high as Prime Minister Noboru Takeshita and taints others in the governing party.

Takumi Ueda became the first politician to give up his seat in the Japanese Diet, or parliament, because of the scandal. His resignation increases pressure on implicated leaders of the governing Liberal Democratic Party, including former Prime Minister Yasuhiro Nakasone. He led the government when the stock profiteering took place in 1986.

The affair involves top ruling and opposition party members who purchased unlisted shares of Recruit Cosmos Co., a real estate firm. They reaped massive profits after they began trading them publicly in October 1986.

″I accept responsibility, resign from my parliamentary seat and apologize deeply to the people,″ said Ueda of the leading opposition group, the Japan Socialist Party.

He is the 15th legislator linked to the scandal, including Takeshita and Finance Minister Kiichi Miyazawa of the ruling Liberal Democratic Party.

Ueda’s party has led opposition parties in demanding a parliamentary investigation of the scandal despite reluctance by the governing party.

Ueda, like many others implicated, denied knowledge of the transaction in which a former aide was said to have used his name to purchase 5,000 shares in September 1986, just one month before they were listed on the over-the-counter market in Tokyo.

In Japan, public share offers usually rise substantially in the first few days after trading begins. People can be legally invited to purchase pre- listed shares and often make hefty profits.

The government has said the trading of the shares was legal under Japanese securities laws, but opposition parties have raised ethical questions anyway.

Socialist Party Chairwoman Takako Doi hailed Ueda’s decision to resign and described the Recruit scandal as ″worse than the Lockheed scandal″ in which the U.S. Lockheed Corp. allegedly gave millions of dollars in bribes to Japanese politicians for aircraft sales.

The Lockheed scandal broke in February 1976 and led to the conviction of former Prime Minister Kakuei Tanaka.

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