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Prosecutors Indict Business Leaders In Japanese Scandal

March 4, 1989

TOKYO (AP) _ Prosecutors today indicted four businessmen for bribery in a stock scandal that has toppled several high-ranking government officials and tarnished the reputation of Prime Minister Noboru Takeshita.

Those indicted today included Hiromasa Ezoe, the 52-year-old founder and former chairman of the Recruit Co. conglomerate, the prosecutors’ office said. Ezoe, arrested Feb. 13, is accused of giving bribes.

The company reportedly sold about 687,000 unlisted stocks of its real estate subsidiary, Recruit Cosmos Co., at bargain prices to politicians, their aides, and other prominent figures in September 1986. Purchasers made huge profits when the stocks went public and skyrocketed in value.

Also indicted were Ei Shikiba, 55, and Hisahiko Hasegawa, 56, two former officials of the giant private company, Nippon Telegraph and Telephone, prosecutors said. They are accused of receiving Recruit bribes.

Hiroshi Kobayashi, the 43-year-old vice president of First Finance, was also indicted for offering bribes, prosecutors said. First Finance is a Recruit subsidiary that financed the stock sales.

Today’s indictments were the first since November, when prosecutors indicted former Recruit official Hiroshi Matsubara for allegedly trying to bribe an opposition lawmaker into soft-pedaling a parliamentary investigation into the scandal.

Since the stock scandal became public last summer, more than 10 politicians and business leaders have resigned. Among them were three members of Takeshita’s cabinet, including former Finance Minister Kiichi Miyazawa.

Takeshita faces opposition calls in parliament to resign or account for his links to the scandal. The parties have urged Takeshita to submit purchase contracts and other documents for Recruit shares allegedly held by his former secretary, Ihei Aoki, and Katsuyuki Fukuda, a relative of Takeshita.

NTT officials were among those who received unlisted Recruit stocks. The telecommunications company reportedly extended special favors to Recruit, including resale to Recruit of two U.S.-made Cray supercomputers and the leasing of telephone lines at reduced rates.

News reports today said NTT also has made special arrangements for Recruit to use an emergency fast-speed digital circuit free of charge.

Kyodo News Service said the prosecutors will question Ezoe further about former NTT chairman Hisashi Shinto’s role in the scandal. News reports have said Shinto met Ezoe twice in 1985 to discuss the resale of the Cray computers.

In the stock scandal, former Prime Minister Yasuhiro Nakasone is suspected of telling NTT to buy the two supercomputers and sell them to Recruit to benefit the company.

Nakasone on Monday denied the charge.

Update hourly