Two former employees of collapsed Yamaichi Securities Co., one a senior managing director, on March 17 admitted to charges of conspiring to make illegal payoffs, while another former senior managing director pleaded not guilty.

Former Senior Managing Director Hidekuni Iyama, 59, denied conspiring to pay off sokaiya Ryuichi Koike with 107 million yen as he stood before the Tokyo District Court. "I have never conspired to give payoffs to Koike. I did not know the customer was a sokaiya and a shareholder," he said in the court's first hearing session.

Mitsuharu Matsushita, 55, a former Yamaichi sales department chief for the metropolitan area, pleaded guilty to conspiring with other Yamaichi executives to payoff Koike. "It (the indictment) is correct. I deeply regret it," Matsushita said.

His lawyer called for leniency, saying he hopes consideration will be given to the fact that the defendant merely followed the decisions of the company's top management. The defendant's involvement in this case stems from his loyalty to the company as "a cog in the wheel," the lawyer argued. "He was in a position in which he was unable to avoid being involved in this case," the lawyer said.

At the same session, Hiromichi Ishikawa, 60, another former senior managing director, owned up to charges that he conspired with the other executives to provide 316 million yen in payoffs to Tokyo firm Showa Leasing Co. -- a case with links to both Iyama and Matsushita.

Both have been indicted in connection with the case, with Iyama admitting some points in the indictment and Matsushita owning up to the charges.

The Commercial Code bans firms from giving financial benefits to racketeers. The Securities and Exchange Law bans brokerages from compensating clients for investment losses and from conducting discretionary stock deals on behalf of investors.