The founder of Recruit Co. and three...

The founder of Recruit Co. and three other businessmen were arrested in a stock-trading scandal that has shaken Japan’s governing party and contributed to its loss in a special parliamentary election. The opposition Japan Socialist Party, victorious in Sunday’s by-election, demanded that Prime Minister Noboru Takeshita resign or dissolve Parliament “so the people can express their will” about the Recruit scandal. Recruit reportedly sold thousands of unlisted shares of stock at bargain prices to politicians, their aides and other prominent people. The purchasers then profited when the stocks were publicly traded and skyrocketed in value. The four who were arrested were Hiromasa Ezoe, founder and former chairman of the information services conglomerate; a vice president of a Recruit subsidiary and two former officials of Nippon Telegraph & Telephone, Japan’s largest firm.