Arrest Marks New Japanese Stock Scandal

A former associate of ex-Prime Minister Yasuhiro Nakasone has been arrested for alleged illegal stock market dealings a year after the Recruit Corp. scandal wrecked a government.

The Tokyo District Prosecutor’s Office on Thursday arrested real estate company owner and speculator Mitsuhiro Kotani, 53, on suspicion of manipulating shares of a hotel chain.

A spokesman for the office said Kotani and a Korean national, Shuichi Gon, repeatedly used false names to buy shares of Fujita Tourist Enterprises in an attempt to push up the stock price. That is a violation of Japan’s Securities and Exchange Law.

Kotani was a member of Nakasone’s personal political organization until 1988, when he was asked to leave because of concern over his aggressive tactics in a takeover bid. There has been no suggestion that Nakasone, who was prime minister from 1983 to 1988, is connected with the latest case.

The Recruit scandal, which broke in 1988 and shook the country for a year, revealed a web of corruption linking politics and big business in Japan. It wrecked the careers of three would-be prime ministers and helped deal the ruling Liberal Democratic Party a stunning defeat in elections for the upper house of parliament.

Thirteen people, including two politicians and a close aide of Nakasone, were arrested on bribery charges. Nakasone was forced to resign from the party.