Related topics

Japan Parliament Questions Matsuno

February 4, 1998

TOKYO (AP) _ The former head of the securities bureau at Japan’s scandal-ridden Finance Ministry said Wednesday he did not advise a failed securities firm to hide losses.

Answering questions before Japan’s Parliament, Nobuhiko Matsuno said, however, he did remember receiving reports from Yamaichi Securities Co. about helping favored corporate clients avoid reporting losses in an accounting shell game known as ``tobashi.″

He said Yamaichi’s move to hide these losses by shifting them to overseas subsidiaries and off-the-books accounts was ``extremely regrettable″ and that he felt some responsibility as an official overseeing the securities industry.

``But I didn’t instruct Yamaichi″ to hide the losses, he said.

The brokerage, one of Japan’s ``Big Four,″ failed Nov. 24 after trying for years to juggle trading losses stemming from the collapse of Japan’s real estate and stock markets earlier this decade.

Last week, business newspaper Nihon Keizai Shimbun reported that Matsuno knew that Yamaichi shifted its losses overseas as far back as 1991, citing Yamaichi executives.

The link to Yamaichi is part of a wider scandal centering on the Finance Ministry, where officials are accused of accepting lavish entertainment from banks in return for favors.

The larger scandal, the most far-reaching of a number of recent cases implicating Japan’s corporate and bureaucratic elites, has resulted in the arrest of two Finance Ministry bureaucrats and resignation of the ministry’s two top-ranked officials. The government is now considering new ethics laws for public servants.

Also Wednesday, an internal investigation into improprieties at the ministry is likely to involve more than a quarter of the officials at its headquarters and take twice as long as initially expected, a ministry official said.

``Some originally thought the investigation would last just two months, but now the goal is to have a report ready by the time the current session of Parliament ends in June _ that’s a little more realistic,″ Naoki Kajiyama, counselor of the minister’s secretariat, told Dow Jones Newswires.

Kajiyama said the number of officials to be investigated will come to around 550. There are about 2,000 people employed at the ministry’s main building in the heart of Tokyo’s government district.

In another high-profile scandal, authorities decided to punish 11 National Police Agency officials in connection with the arrest last month of a former police detective on charges of accepting bribes from Daiwa Securities Co., the Asahi newspaper said.

Meanwhile, the Tokyo District Prosecutors Office questioned former Daiwa Securities chairman Sadakane Doi about an alleged meeting between him and an arrested detective, Kyodo News reported.

Separately, at a Tokyo District Court hearing, two corporate racketeers pleaded guilty to charges of receiving illicit payoffs from Mitsubishi Motors Corp., Kyodo said.

Update hourly