Finance Minister Among Those Who Bought Unlisted Stocks
TOKYO (AP) _ Japan’s Finance Minister was among leading political figures who bought unlisted stocks in a series of questionable equitities purchases, the Japan Communist Party has alleged.
Finance Minister Kiichi Miyazawa was among those who purchased shares of a real estate firm before they were offered publicly, and later sold them for a huge profit, Communist Party Vice Chariman Koichi Ueda said at a news conference Tuesday.
The Communist Party said it obtained documents allegedly showing the purchases by Miyazawa and senior private secretaries of other leading politicians including Prime Minister Noboru Takeshita and former Premier Yasuhiro Nakasone.
Political secretaries in Japan are similar to Western politicians’ chiefs of staff and are politicians’ closest aides.
Takeshita, Nakasone and other political leaders have acknowledged their aides were involved in the purchases but have said they did not know about them at the time. The Communist Party’s allegations were the first against Miyazawa.
Miyazawa bought 10,000 shares of the real estate firm Recruit-Cosmos Co. for the equivalent of $195,000 in September 1986, a month before the shares were listed publicly.
Ueda said Miyazawa made a profit of at least $130,000 since he bought the shares at $19.50 each and they rose to more than $32.50 each when listed.
In Western equities markets such transactions constitute insider trading, or trading on privileged information, and are illegal. Japan only has vague regulations concerning use of confidential information in transactions, and companies are free to offer shares to whomever they wish at any price.
The government has moved to tighten Japanese laws against insider trading but the action is not retroactive.
Miyazawa’s secretary, Nobuyoshi Nakatsu, said by telephone that no comment from Miyazawa would be available.
But Kyodo News Service said Miyazawa told Japanese reporters at a hastily called news conference that he allowed former secretary Tsuneo Hattori to use his name, ″but as I repeated again and again, I myself am not involved in any dealings. I am, rather, a victim.″
Asked if the shares were bought under his or Hattori’s name, Miyazawa said he did not know. Hattori resigned last week, saying he wanted to make way for younger people.
One of the documents obtained by the Communist Party, widely reproduced in newspapers and on television, shows the names of nine reputed share purchasers, including Miyazawa and the aides to Takeshita and Nakasone.
Do Best Inc., a stock trading firm, acquired 80,000 shares of Recruit- Cosmos and turned them over to the nine for $19.50 a share a month before the shares went on sale, according to the document.
Another Communist Party official who would not be identified said the party received the documents anonymously but determined they were genuine.
The charges against Miyazawa apparently had little effect on the Tokyo Stock Market, which a dealer said was slowed more by the sharp fall of the dollar against the yen.
The so-called Recruit scandal unfolded in July as a bribery case in Kawasaki, a city south of Tokyo, but spread to encompass some of the country’s most powerful politicians or their aides as well as senior journalists and at least one professor.
Experts say the practice of selling stocks at low prices to politicians has been common, with companies making political contributions in this way.