Yoji Yamada, president of Nippon Shinpan Co., said Thursday he will resign next month to take the blame for the “sokaiya” racketeer payoff scandal rocking the major loan company but will remain involved in the firm’s management plans.
“As head of Nippon Shinpan, I feel I bear unlimited responsibility for the scandal,” Yamada told a news conference at the Tokyo Stock Exchange.
Yamada, 54, said the company’s new leadership, including his replacement, will be decided in the first or second week of December. He said he will formally resign when they take over.
Sources close to the firm said a member of Nippon Shinpan’s senior management was expected to succeed Yamada, and that Managing Director Tadaomi Ito, 61, may be the one closest to the post. The decision will be made after consulting with major business partners and main creditor banks, they added.
The sources said Yamada’s successor is likely to come from within the firm because the consumer credit business is a unique operation, and that it would be difficult to find anyone outside Nippon Shinpan, popularly known as Nicos after its credit card, who can fully understand it.
Earlier this week, Yamada resigned as chairman of the Japan Federation of Consumer Credit Companies. He also quit the board of the Japan Business Federation (Nippon Keidanren).
Eight Nippon Shinpan officials were arrested Saturday on suspicion of giving cash to a sokaiya over a three-year period from late 1999 as a reward for the man using his influence to keep his fellow corporate extortionists from disrupting the firm’s general shareholders’ meetings.
Police are also trying to determine if Yamada was directly involved in the payoffs, investigation sources said.
Yamada, the eldest son of the firm’s founder, Mitsunari Yamada, said he is bowing out without a retirement allowance to help the firm can regain public trust. He also said he will continue to be involved in the firm’s long-term management plans.
Nippon Shinpan created an internal task force Tuesday, consisting mainly of auditors and lawyers, to investigate the payoffs and work out ways to prevent such practices from happening again. They will release the results of their probe in December.
According to police, one of Nippon Shinpan’s senior managing directors, Yoshihisa Oshio, 62, and the seven others are suspected of remitting 28.35 million yen to the bank account of sokaiya Kikuo Kondo, 60, between late November 1999 and late last September.
Kondo was arrested Saturday along with Oshio and the seven other Nippon Shinpan officials.
Nippon Shinpan had been paying off Kondo every month since December 1991. The amount as of September had reached nearly 80 million yen, police sources said.
The arrests were made for the payments for which the three-year statute of limitations has not yet run out.
Sokaiya, who are nominal shareholders in the target firm, specialize in extorting money by various means, including blackmail and threats to disrupt shareholders’ meetings. They also run protection rackets by promising to keep other disrupters away.
The Commercial Code bans paying off racketeers.
Nippon Shinpan is listed on the TSE’s first section. Established in 1951, it has some 5,300 employees and posted group revenues of 348 billion yen in 2001.
The scandal, however, is expected to significantly tarnish Nippon Shinpan’s image and deal a severe blow to its earnings.
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