Former Yamaichi Securities Co. Chairman Tsugio Yukihira and Atsuo Miki, the firm's former president, were indicted Tuesday on charges of violating the Securities Transaction and Commercial Code by hiding about 270 billion yen in debts and still paying about 6 billion yen in dividends to shareholders, sources close to the Tokyo District Public Prosecutor's Office said.

The special squad of the prosecutor's office at the same time decided not to take action against Ryuji Shirai, 62, former vice president of the bankrupt firm, on the grounds that Yukihira played the central role in the alleged wrongdoings.

The squad also decided not take action against Yamaichi Securities on the grounds that it is now in the process of closing down of its own accord. The Securities Transaction Inspection Commission had accused the company of violating the Stock Transaction Law.

The indictments against Yukihira, 66, and 62-year-old Miki state that they did not list losses of up to 271.8 billion yen on the firm's financial statements from 1995 through 1997 and presented false balance sheets to the Finance Ministry.

The suspects are also accused of paying about 6 billion yen in dividends to shareholders in the fiscal year that ended March 1997, although the company could not have done so had it acknowledged its losses, the indictment said.

The defendants and former company board members decided in a 1991 meeting at a Tokyo hotel to conceal the losses by having a now-deceased board member buy up shares with latent losses to avoid listing them on financial statements, the indictment said.

At the meeting, Yukihira was quoted as saying "Let's go ahead with this scheme." Miki was quoted as concurring by saying, "It cannot be helped." Yamaichi is charged with founding a paper company in 1992 to buy up shares with latent losses which had previously been secreted in the portfolios of eight client companies.