Ex-Hostess in Japan’s Bank Scandal Is Shadowy Figure

Nui Onoue, 61, the curious bar hostess turned millionaire who said she got stock tips from God, is accused of committing massive fraud and recently became insolvent with $3 billion in debts, has come to symbolize Japan’s 1980s era of excess.

Onoue was arrested late last month on charges of using $2.5 billion worth of bogus certificates of deposits as collateral to borrow money from financial institutions for stock investments.

Analysts say the scale of the alleged fraud and the lack of proper financial controls are characteristic of the era of Japan’s financial bubble, when investors seemed to believe that any stake in stocks or land was safe because all assets would keep rising skyward. Her bankruptcy may be a harbinger of what is to come in the weakened financial arena in Japan.

Little is known of Onoue’s early history. Raised in a small village, she moved to Osaka, as many young women of her day did, to work in a bar serving drinks to wealthy businessmen.

It is unclear where she found the capital to make a new start, but at age 35 Onoue built her first restaurant and mah jong parlor. Police are investigating reports that gangsters frequented her establishment and may have been the source of her money.

Sales at Onoue’s restaurant totaled $7.4 million last year, but she never paid taxes, according to newspaper reports, because she maintained that the establishments made no money. Nevertheless, she was recently awarded a coveted prize for being her town’s most honest taxpayer.

If she didn’t make money on her restaurant, she must have had a very profitable side business because by the end of last year she owned roughly $800 million worth of shares in 20 different companies. A devotee of a Buddhist sect, she held weekend prayer sessions, demanding that her brokers attend if they wanted her business.

They were more than eager to follow. After all, she was regarded by many as the most active individual investor in Japan, with large stakes in Japan’s banks. At one point she was the largest individual shareholder in the Industrial Bank of Japan, and an official of the bank reportedly accompanied her on a pilgrimage to Nepal.

But the seemingly solid stocks in which Onoue invested plunged in 1990. By some accounts she lost more than $1 billion. Onoue allegedly persuaded a bank officer at Toyo Shinkin, a finance company, to forge certificates of deposit, which she then used as collateral to borrow money.

The biggest victim of the alleged fraud was the Industrial Bank of Japan and its financial subsidiaries, which together lent close to $2 billion to Onoue. President Yoh Kurosawa said the bank did wonder where Onoue’s money had come from but added that as a private institution it couldn’t track down the money.

One of the favorite pastimes of journalists these days is to speculate on the source of Onoue’s riches. The most conventional view is that she was laundering money for gangsters. The most unconventional is that she was investing for the government of North Korea.