Japanese Trade Union Confederation (RENGO)

KOGA Says!
Statement on the Arrest of Yoshiaki Murakami, Suspected of Securities and Exchange Law Violation

1. On June 5th, Yoshiaki Murakami, the head of an investment fund (known as the Murakami Fund), was arrested on suspicion of violating the Securities and Exchange Law. This incident emerged as a result of another investigation into alleged violations of the Securities and Exchange Law by then Livedoor Co. President Takafumi Horie and others that was discovered by investigators last January. Murakami was suspected of insider trading in connection with the purchase of Nippon Broadcasting System, Inc. stocks after having allegedly obtained information last year from Livedoor of its desire to purchase massive shares of the NBS.
   
   
2. Murakami initially denied the allegations of insider trading saying "I haven't done anything illegal" at a voluntary questioning session with prosecutors before his arrest. Murakami then made a sudden change admitting to the allegations at a June 5th press conference, where he also announced that he would quit the stock business. At that press conference, while he admitted to mistake of committing insider trading, he repeatedly said "I just happened to hear about it. I did not purchase the stocks with any intention of making a profit on them." He insisted that the purchase was "unintended" and not "intentional" – establishing intent is necessary to prove any violation of the Securities and Exchange Law.
   
   
3. The Murakami Fund's approach seems to exist in a consumer-less finance/stock market and only sees firms as way to make money. The fund appears to push up stock prices excessively throwing capital markets into confusion under stock-price-supremacy selling stocks at a profit taking advantage in the resulting confusion. The fund has mounted hostile corporate takeover bids (TOB) on such firms as Shoei Co., Ltd. and Tokyo Style Co., Ltd. The Murakami Fund held nearly half of the shares in the Hanshin Electric Railway Co., Ltd. While showing its intention to take part in Hanshin’s management and urging the sale of assets to the management, the Murakami Fund recently announced its intention to accept Hankyu Holdings Inc.'s takeover bid.
   
   
4. It is suspected that insider trading was the cause of this scandal, but the most urgent duty facing us is to bring about full disclosure, including illegal activities, in order to reconstruct the capital market into a trustworthy one. RENGO has voiced strong concerns over this climate in which corporate value is judged only in terms of stock prices and corporations are traded in money games. Who do corporations belong to? RENGO believes the answer to this question lies not in simply denying that firms belong to shareholders but also that films belong to clients, customers, and furthermore employees. RENGO aims to blow whistle anew on stock-price-supremacy/shareholder-supremacy.
   
   
5. In addition to its goals for the realization of a "labor-centered welfare society," a "safe and fair society" where worker’s efforts are rewarded, RENGO will utilize its full force to alter excessive deregulation of the finance market as well as the current belief in market-economy-supremacy and correct the disparities growing on all fronts.