The J-Files

Japan, like the moon, has a dark side

These troublemakers, many of whom self-righteously claim to be troubleshooters, are nothing more than extortionists or racketeers, known here as sokaiya. They operate by buying stock in listed companies and then using their holdings as leverage for illegal payoffs. The term comes from kabushiki sokaiya, or meeting of stockholders.

By agreeing not to disrupt these meetings with scurrilous comments or revelations of alleged corporate misbehavior, sokaiya are paid off for their silence, which for many has been indeed golden. A former leading sokaiya, Kaoru Ogawa, once claimed an income of ¥150 million a year and maintained homes in Tokyo and Hawaii.

Sokaiya collect their payoffs in various ways. Outright demands for packets of hard cash are mixed with subscriptions to spurious newsletters or payments for "services rendered." Under the commercial law, such links are illegal. In August 1998, it became known that major companies such as Toyota, Nissan, and Japan Airlines had paid a sokaiya-linked company for the rental of potted plants for decorating their offices. JAL was pounced on hard, as the authorities thought that the airline had brazenly defied a September 1997 police order asking major Japanese corporations to stop doing business with "anti-social elements."

JAL's misfortunes surfaced when one of the partners in the plant-rental scam had the ill luck to be murdered by an associate during a periodic sokaiya spat. Sorting through the deceased's papers, the cops found unplanted evidence in the form of records for JAL's payments, made well after the 1997 police warning. In fact, what the airline had done was serve notice to end the spurious contract by the end of the then-current fiscal year. The last payment for horticultural hiring was in March 1998; JAL's "crime" was minor. The prosecutors, unable to make a major case, nevertheless brought airline executives and sokaiya to book. The former were fined, the latter jailed. Meanwhile, Toyota and Nissan were not sanctioned, having ended their dalliance with the plant lessors somewhat earlier.

Keep in mind that relatively small sums were involved -- about $1.5 million over eight years. That's small beer compared to the enormous pay-offs received by Japan's current sokaiya champion, Ryuichi Koike. Koike has pocketed a spectacular ¥12.4 billion from the Dai-Ichi Kangyo Bank and the top four (now three) Japanese securities houses. The revelations of his achievements have resulted in the fall of no less than 31 top executives of these companies and others. Koike-san, happily, is now a guest of the correctional service.

Word on the street is that Koike knew of lists of specially privileged borrowers given low-interest loans, and favored politicians offered juicy IPOs or refunds on slumped stockholdings. Such lists would be hot stuff in the wrong hands. These revelations of low doings in high places sent ripples of disgust through Japanese society last year, triggering a fresh police warning to blue-chip corporations. A clampdown followed, leading to a thinning of the ranks of small-time sokaiya.

A colleague involved in fending off approaches from such unsavory types claims that they'll be back if and when the current anti-sokaiya mood subsides. "Companies must be on their guard," he claims, "because in today's climate, an organization that deals with these elements is regarded as being just as bad as the unscrupulous people who approach them." Proof of his point can be seen in the public vilification of Kobe Steel, caught dealing with sokaiya in November of 1998.

When Tokyo's finest fingered JAL, they thought they might get a hold on the Rondan Doyukai, the toughest, meanest sokaiya group in Japan, linked to the Yamaguchi-gumi yakuza (gangster) group -- those wonderful people responsible for the labor racketeering which helped create Japan's cripplingly high waterfront dock charges, among other high crimes and misdemeanors. Alas, all they turned up was a tempest in a flowerpot. But there is an easier way of keeping tabs on this odious organization: There's got to be a Rondan Doyukai website they can monitor. The Net, after all, is for everybody. Look out for a URL along the lines of: http:slash-slash sokaiya.com."