Newspaper article The Christian Science Monitor

Japan Pays a Price for Smooth Meetings

Newspaper article The Christian Science Monitor

Japan Pays a Price for Smooth Meetings

Article excerpt

IF a society is open and democratic politically, it is usually open and democratic economically as well.

Japan's claim to be an open and democratic society has been tarnished politically by a recent spate of scandals involving politicians, rightist extremists, and the yakuza, the mafia of Japan. Media attention has focused on these political scandals.

Less attention has been paid to the economic downside of Japanese society - for instance, the Ito-Yokado case, a scandal involving payments to a gangster group by Japan's biggest convenience-store chain, a company that as recently as September was commended for its services to consumers by the Tokyo Stock Exchange and the Ministry of International Trade and Industry.

Ito-Yokado owns Seven-Eleven convenience stores in Japan and the United States, having acquired a majority interest two years ago in the Southland Corporation of Dallas, from which it originally learned the business. Ito-Yokado has long been a favorite of international stock analysts because of its "sqeaky-clean" image (as one analyst told the Wall Street Journal recently), its super-efficient distribution system, and its conservative fiscal management.

But last month its founder and longtime president, Masatoshi Ito, was forced to resign after police arrested a couple of his close subordinates on charges of illegally funneling 27 million yen (about $216,000) to a gangster group known as sokaiya. Sokai means "general assembly" in Japanese and is the term for the annual meeting of company shareholders. Ya is the equivalent of "-er" as in cobbler or carpenter. So a sokaiya is a person who makes a business out of attending company shareholder meetings.

A typical sokaiya does own a few shares in the company whose meetings he attends. He also usually publishes what purports to be a newsletter giving the inside story of various company dealings. With these as his weapons, he goes to a targeted company and threatens to reveal some scandal the company wishes to hide - perhaps a director's marital problems, perhaps something involving shoddy products or unethical dealings.

There may be some truth in the sokaiya's claims, or maybe not. …

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