Japan Premier’s Secretary Tied to Stock Scandal

Prime Minister Noboru Takeshita acknowledged today that his private secretary was implicated in a snowballing stock-trading scandal that also reportedly involved secretaries of former Japanese leader Yasuhiro Nakasone and the current finance minister.

The scandal, involving the sale of stock obtained at bargain-basement prices, has already caused the resignation of the chairman of the company involved in the affair and the president of a leading Japanese economic journal.

Takeshita told reporters that his secretary, Ihei Aoki, admitted benefiting from the scheme and apologized to the prime minister for being “thoughtless.”

Takeshita, who took office last November, expressed concern that the affair may impede his sweeping tax reform program in the next session of the Diet, Japan’s Parliament, to be called later this month or early August.

Sale of Unlisted Shares

Opposition parties said they will take up the scandal when the Diet debates Takeshita’s tax program.

The scandal surfaced after the Finance Ministry enforced tighter controls in June on insider trading.

Recruit Co., a major information company, was alleged to have sold unlisted shares of its real estate subsidiary, Recruit Cosmos Co., to selected people, mostly politicians and business executives, in 1984.

The stock was traded on the market two years later at prices about four times higher, enabling the shareholders to earn huge profits.

Chairman Takes Responsibility

Hiromasa Ezoe, board chairman of Recruit, resigned Wednesday to take “social and moral responsibility” for the affair.

Ko Morita, president of the leading economic journal, Nihon Keizai Shimbun, also resigned Wednesday night, the paper announced today.

News reports said Morita earned about $640,000 by selling all 20,000 shares he had purchased from Recruit.

They said the buyers included secretaries of many influential political leaders such as Nakasone, former Foreign Minister Shintaro Abe and Finance Minister Kiichi Miyazawa.