An LDP Lower House member became entangled in the scandals enveloping the country's four major brokerages Monday when he admitted to receiving profits from Nikko Securities Co. through dubious equity investments.
Earlier in the day, a newspaper reported that Nikko provided Shokei Arai with about 40 million yen between October 1995 and February 1997 through illegal means such as conducting stock transactions without prior orders from investors.
The paper also reported that the Tokyo District Public Prosecutor's Office is investigating the case. At a hastily arranged news conference, Arai said the illegal transactions were conducted without his knowledge from an account that he opened in his friend's name in autumn 1995 and closed early this year.
"I regret that illegal deals existed in my transactions," Arai said. "I had no idea what was going on," he said. "I never asked for illegal transactions to make profits." He also stressed that he eventually became involved in the transactions against his will but gave no specifics.
Arai said he will resign as a lawmaker if his statements are proved to be false. He also pointed out that there were legal transactions conducted from the account in which he gave orders on the buying and selling of stocks based on advice from Nikko Securities. He declined to comment on the amount of profit he made through these transactions.
The revelation of shady deals between Arai and Nikko came after prosecutors probed a series of racketeer-linked payoff scandals involving Nomura Securities Co., Daiwa Securities Co., Yamaichi Securities Co. and Nikko. Nikko executives have been indicted on charges of violating the Commercial Code by compensating Ryuichi Koike, a "sokaiya" corporate extortionist, for stock investment losses.