3 Indicted in Japan Stock Scandal

From Times Wire Services

Three business executives detained in connection with a widening stock-for-favors political scandal were indicted on bribery charges Monday, prosecutors reported.

Former Nippon Telegraph & Telephone Chairman Hisashi Shinto, 78, was charged with receiving bribes from Recruit Co., the telecommunications conglomerate at the heart of the scandal. Hiromasa Ezoe, 52, former chairman of Recruit, and Hiroshi Kobayashi, 43, former president of Recruit’s finance arm, First Finance, were charged with bribing Shinto.

Prosecutors said that Shinto, along with his top aide, accepted unlisted shares of Recruit’s real estate subsidiary, Recruit Cosmos Co., in September, 1986, and made a $168,000 profit when the price of the shares soared when they went public a month later.

Prosecutors said the deal violated regulations governing NTT, a former state-run telecommunications monopoly, and constituted bribery.


Prosecutors allege Shinto helped Recruit expand its telecommunication business in return for the stock.

The scandal, which surfaced in June last year, has rocked the government of Prime Minister Noboru Takeshita and hurt Takeshita’s leadership within his ruling Liberal Democratic Party.