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Finance Minister Implicated In Stock Scandal Resigns

December 9, 1988

TOKYO (AP) _ Finance Minister Kiichi Miyazawa, implicated in a stock scandal that has damaged the governing party, resigned Friday to help clear opposition to passage of tax reform bills in parliament.

Miyazawa said an aide’s involvement in buying unlisted shares of a real estate company had led him to make ″inaccurate″ statements to lawmakers. He said he was resigning to take responsibility and hoped the move would speed passage of the tax legislation.

″Personally, I hope the tax reform bills will be passed soon, and it doesn’t matter what happens to me,″ he said during an interview on national television.

Miyazawa told reporters Prime Minister Noboru Takeshita approved of his resignation. Japan’s Kyodo News Service, quoting unidentified sources, said Takeshita will temporarily serve as finance minister until a replacement is found for Miyazawa.

Opposition parties had demanded that Miyazawa resign to take responsibility for repeatedly giving conflicting accounts about his role in the stock trading controversy. They refused to resume parliamentary debate on the tax reform package until he did so.

Miyazawa, a two-term finance minister and veteran politician, changed accounts of his involvement in the stock deals at least three times in his statements to parliamentary committees investigating the scandal.

The controversy involves purchases of real estate stocks of Recruit Cosmos Co. by dozens of leaders of the governing Liberal Democratic Party, including Miyazawa, Takeshita and former Foreign Minister Shintaro Abe - Japan’s top three politicians.

Political analysts have said Miyazawa’s resignation probably would pave the way for passage of the tax reform package during the current session of the Diet, or parliament, which ends on Dec. 29.

Miyazawa has been considered a candidate for prime minister.

In September, when his involvement in the controversy was first made known, he told a news conference that he took no part in the dealings and had no knowledge about the unlisted shares of the real estate company.

Later, an investigation by the Japan Communist Party showed that Miyazawa bought 10,000 unlisted shares of Recruit Cosmos in September 1986 and earned more than $164,000 in profits by selling them immediately after the company went public a month later.

After that happened, he told the committee that his former aide bought shares from his business associate without his knowledge.

It was disclosed in a parliamentary investigation last month that the aide, Tsuneo Hattori, bought shares directly from Recruit Inc., the real estate firm’s parent company.

Miyazawa told a news conference last week that he would give up his Cabinet position and his seat in parliament, which he has held since 1959, if he was obliged to change his testimony again. He also hinted that he was willing to resign if it would help secure passage of the tax reform package.

Debate on the tax legislation has been stalled since last week, when opposition parties singled out Miyazawa and demanded that the finance minister submit material evidence to prove the accuracy of his earlier statements.

Miyazawa, however, refused to do so, saying he had lost all evidence such as stock transaction records and receipts.

The legislation, Japan’s first major overhaul of its tax system since the end of the World War II, has been a top priority for the Liberal Democratic Party for a decade.

Successive administrations have failed to enact the reform due to public and opposition party resistance. Former Prime Minister Yasuhiro Nakasone, under whom Miyazawa also served as finance minister, staked his political career on tax reform and lost.

The new package simplifies corporate and personal income tax scales and introduces a 3 percent sales tax.

The governing party, which commands a majority in both houses of parliament, forced the tax bill through the lower house last month. The legislation has been debated in the upper house since then.

The Liberal Democrats could enact the tax laws despite opposition resistance. But this would violate Japanese political tradition, which values consensus, and could cost the party votes in the next election, said Masumi Ishikawa, political commentator for the mass-circulation daily Asahi Shimbun.

A survey by another leading daily, the Mainichi Shimbun, showed Friday that public support for the Takeshita administration has dropped to 18 percent from last December’s 30 percent - the third-lowest rating for a prime minister since World War II.

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