FOCUS-Fresh investigation ordered on Japan Mr Yen
11:26 a.m. Mar 03, 1998 Eastern
By Yoko Kobayashi
TOKYO, March 3 (Reuters) - Japan's finance minister said on Tuesday he
was reopening an investigation into the past conduct of top financial
bureaucrat Eisuke Sakakibara, after questions were raised in parliament
about his alleged influence peddling.
''I will take an interest and look at the facts by looking at the
materials of the past investigation,'' Finance Minister Hikaru Matsunaga
said during a question and answer session of the budget committee of the
Lower House of parliament.
''It's better to clarify whether the ministry's findings were accurate
or whether (Sakakibara) demonstrated such conduct as alleged by a member
of parliament,'' Matsunaga said.
An opposition member of parliament earlier demanded information on
reports Sakakibara was entertained over 15 times by a friend in the
private sector and that he persuaded Daiwa Securities Co to compensate
his friend for investment losses.
After Sakakibara intervened, Daiwa Securities had provided 220 million
yen ($1.74 million) in compensation for losses incurred by the friend
through warrant transactions made through the brokerage, said opposition
MP Shozo Kusakawa.
Kusakawa, a 69-year-old former labour leader who has been a
parliamentarian for 21 years, roiled financial markets with his lengthy
allegations about Sakakibara's conduct.
The 56-year-old Sakakibara, who is vice finance minister for
international affairs, is currently on a tour of Malaysia, Thailand, and
Singapore and could not be reached for comment.
But a ministry official who spoke to him after the committee session
said he believed Sakakibara had been informed of the parliamentary
questioning.
''He was unmoved, just his usual self,'' the official said.
Almost at the exact moment he was coming under fire in parliament,
Sakakibara trumpeted Japan's economic policy to Asian counterparts --
saying Tokyo was prepared to take fresh steps to ensure robust recovery.
''We have taken necessary measures and continue to address the problem
recognising that Japan is anchor economy in the region,'' Sakakibara,
who returns to Tokyo on Friday, told a news conference in Kuala Lumpur.
Ministry of Finance Deputy Vice Minister Toshiro Muto told the same
committee that the MOF investigation in 1991 had found that there was no
wrongdoing in Sakakibara's relationship with the acquaintance.
Prime Minister Ryutaro Hashimoto, who has relied on the outspoken
Sakakibara to articulate Japan's economic policies abroad, demurred from
making a direct comment, saying only: ''Investigations should be carried
out as necessary in order to avoid public distrust towards civil
servants and to thoroughly enforce official discipline.''
As the cloud of doubt descended upon Sakakibara, dubbed ''Mr Yen'' for
his successes in moving currencies, the dollar briefly touched 126 yen.
Before the parliament discussions, it was trading around 125.60 yen.
Currency traders said the focus was now on whether Hashimoto would
defend Sakakibara, who is considered a key figure in Japan's foreign
exchange and external economic policies.
''If the allegations are true, then it would become a huge problem. He
is going to be out of the game,'' said Shigenori Okazaki, a political
analyst at SBC Warburg in Tokyo.
While analysts said his position could be in jeopardy if the allegations
proved to be true, legal experts said they were unsure what laws, if
any, he might have broken.
''Merely calling a brokerage and asking them to compensate losses for
somebody else is not illegal,'' said Tokyo lawyer Isao Ashindo.
''But if one is asked by somebody to prevail on a brokerage to
compensate for losses and the person does it, that could mean the caller
is an accomplice,'' he told Reuters.
It is not the first time the high-profile Sakakibara has got himself
into hot water.
Last week, he was lambasted in parliament for having agreed at a Group
of Seven meeting last month to a statement saying Japan needed to
increase spending to boost its economy.
He admitted Tokyo did not agree completely with the communique.
Earlier, he was scolded by Matsunaga for denigrating the nation's
parliamentary system.
Beyond the trouble his mouth has landed him in, Sakakibara is also a top
figure in a ministry under fire.
Two bank inspectors from the ministry have been arrested recently on
suspicion of taking bribes in the form of lavish entertainment from
leading banks in return for leaking information about the dates and
contents of inspections.
($1-126 yen)
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