Corporate extortionist? No way. Satoshi Yamamoto prefers to be called a shareholder activist. His small, Tokyo-based publishing company, Rondan Doyukai, invests in Japanese companies and publishes st(> ries on corporate misdeeds in a maga-zine, newsletter, and even a World Wide Web site (www.iijnet.or.jp/rondan). In-sists Yamamoto: 'We are professional shareholders." Yamamoto has not been charged with any offenses and maintains his inno-cence of wrongdoing. But law enforce-ment officials and crirninal attorneys say that Rondan Doyukai is actually Japan's biggest ring of sokaiya, or mobsters linked to yakuza crime syndicates that specialize in corporate extortion (BWLJuly 7). By threatening to disclose unsavory informa-tion through its magazines or at shareholder meetings, these sources say, Rondan has squeezed payoffs out of some of Japan's biggest companies. "Ron-dan Doyukai is by far the most powerful sokaiya group," contends Yoshiaki Shinozaki, a prominent criminal attorney who advises com-panies that have come under pres-sure from racketeers. Yamamoto says Rondan did accept hush money from companies before the practice was outlawed in 1982. Headds that two Rondan associates were arrested in counection with payoff scan-dals involving Kirin Brewery Co. in 1993 and Ajinomoto Co., a global food-products maker that pleaded guilty to taking part in a global price-fixing cartel in 1997. Both companies and the TQkyo Metropolitan Police declined to comment on the cases. Yamamoto says one Rondan member was charged with violating the commercial code and has been released on bail. The other was fined and given a suspended sentence, he says. No other industrialized economy has lived with corporate blacknrs

ail the way Japan･ has. In Western countries, gangs tend to stay in the background. But in Japan, yakuza racketeers have long nosy investo Disclosure of their un-derworld links, the brokers feared, would devastate their reputations. Such fears are the bread and butter of sokaiya blacknailers. Mob pressure on corporate Japan has become so per-vasive that, asserts publisher Yamamo-to, many large companies maintain bud-gets for payments to sokaiya. Ten percent of the biuings at Japan's largest law frm, Mori Sogo, now come from advising 100 major listed companies on how to deal with sokaiya. Hideaki Ku-bori, a Mori Sogo partner, has produced videotapes telling companies how to prch vide security for annual meetings-and what to do if the sokaiya show -up. He even holds mock aunual meetings at which he plays the role of a mobster grilling the president. ･ -BLUFFING? The uneasy relation-ship between executives and the sokaiya is turning Japan's annual meeting season into a circle-the-wagons ritual. This year, more than 2,000 major companies held their annual meetings on June 27 to thwart potential blacknailers interested in raising a ruckus. The government dispatched 10,000 cops to the meetings to prcvide security The coordinated meet-ings have reduced mob disrup-tions markedly. In fact, the num- j ber of sokaiya is estimated to l have declined to around 1,000, from 1,700 just after corporate payoffs were banned in 1982. But Moriuchi says mob black-mailers are now demanding-and getting-kickbacks from major companies for steering business to yakuza-related waste-hauling, vending-machine , and construction contracts . Ex-ecutives are also being pressured to purchase costly subscriptions to sokaiya publications that are little more than shams. Osaka-based Takashimaya Co., an upscale department-store chain, says that to protect its name, it funneled at least $1.4 million to sokaiya and sub-scribed to some 300 publications put out by underworld groups. The latest crop of sokaiya scandals shows that extortion can also pass from one generation of executives to another. Back before its 1 971 merger with Nippon Kangyo Bank Ltd., Dai-Ichi Bank Ltd. had a long-running relationship with leg-endary sokaiya and magazine publisher Rikiya Kijima. For years, Kijima kept the bank's annual meetings short and SWAAf.
shareholders didn't question management too closely about absorbing Kailgyo, then Japan's lorh-biggest bank. 'The previ-ous Dai-Ichi management owed a lot to Kljima," says Yushiro lkuyo, a- Smith Barney Inc. banking analyst. Just how much became clear years later. As early as 1985, says a nkB spokesman, Kljima introduced Ryuichi Koike to senior officials at the merged bank. An attorney fa-miliar with the under- . world says Koike de-scribed himself as the successor to Kijima, who died in 1993. The attorney says Koike also suggested he had been sponsored by a yakuza gang. In 1988, when DKB was facing ques-tions over $30 million in questionable loans, Koike helped stffle questions at an annual meeting. Then, starting in 1992, he began receiving loans, some of which were funneled into a property company owned by his brother. A Nomura spokesman says the funds were ulti-mately used to buy shares in Nomura and, possibly, other brokers. A Iawyer for Koike's brother, Yoshnori, declined to comment. After buyipg 301,000 Nomura shares outright and through his brother;:s com-pany, proseeutors say, Koike was well positionedtomake amove onthebroker. Wiith the stock market slumping and the cost of its European expansion soaring, N. omura announced a record

instated ex-Chairman Setsuya Tabuchi and ex-President Yoshihisa Tabuchi (no relation) to the company'is board. Both men had been disgraced and forced to resigu in a 1991 scandal re-volving around helping a mob boss make winofall prcfits. But they remained pow-erful behind the scenes. Sakamaki, who had been pushing to clean up Nomu-ra's image, would have been embar-rassed by public questions about the Tabuchis ahd Nomura's ties to Koike. To win Koike's silence during' the' 1995 annual meeting, proseeutors say, forrner President Sakatnaki approved a $2.8 million ' payoff. Now, prosecutors also want to know if DKB Ient an additional $2.6 million to the Rondan sokaiya group. Yamamoto told BUSINESS WEEK that one of the group's investors did boITOW mon-ey from the Tokyo bank. He de-clined to reveal the investor's name or the amount. The bank says it's looking into the matter. TOOTtILESS. Will Japan ever break free of such intrigue? It will be hard to clean house unless Japan overhauls 'the way it deals with financial wrongdoing. Japan's 'toot. hless Security & Exchange 'Survemance Commission has only 200 staffers, a fraction of the number its U. S. counterpart has. And Japanese prosecutors are hamstrung by laws that prevent wiretapping and sting operations in organized crime cases, unless drugs are invblved. Currently, a conviction on a sokaiya extortion
charge carries but a six-month sen-tence . Hashimoto's government promises to come up with tougher measures to fight blackmailinlegislationnextyear. Buthe has yet to prepare the public for what that could bring. Rooting out the mob fiDm the business world would mean ar-rests, headlines, and an admission that bigmanufatturers andfinancialinstitu-tions have been tainted by colTupt deal-ings. An anti-mob campaign could even turn bloody if the sokaiya and their yakuza allies fight back. "In the end, standing up to them win come down to riskng one's nre," figures Citizen Watch Chairrnan Michio Nakajima, who says he has nev, er paid the sokaiya. But aiter decades of blaeknail, isn't it time for Japan's leaders to fight bank?

By Brian Bremner a9cd Emily　Thronton in Tokyo

(scanner ni yoru OCR torikomi iikagendakedo kanben sina)