Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

AJapan's Firms Face Investor Ire

TOKYO -- Irate Japanese investors grilled executives at two scandal-tainted blue-chip financial firms Friday, but not everyone left satisfied with the replies.


More than 2,300 companies held annual shareholders meetings amid public outrage over an epidemic of corporate scandals involving payoffs to racketeers and other management misdeeds.


But giant brokerage Nomura Securities and Dai-Ichi Kangyo Bank, both embroiled in a high-profile racketeer payoff scandal that has led to more than a dozen arrests, took most of the heat from the floor.


"When are you going to stop just bowing and apologizing?" asked a shareholder at Dai-Ichi Kangyo's annual meeting, where ranks of suited executives stood and bowed four times in expiation for top management's misdeeds.


Chief executives at the two top-notch financial firms apologized for the scandal -- the second to hit Nomura in six years -- and pledged to cut ties with racketeers and keep their hands clean in the future.


Japanese firms have long bunched their annual shareholders' meetings on a single day, a tradition which helps them to dodge questions about scandals and mismanagement both from legitimate shareholders and from professional corporate extortionists called sokaiya who target such events.


Executives also hold rehearsals for the events, which they traditionally hope to breeze through in 30 minutes.


Sokaiya try to extort money from firms by threatening to expose dubious business practices or stir up other trouble at shareholders' meetings. Some firms have also employed sokaiya to muzzle regular shareholders.


Racketeer scandals are nothing new, but the fresh affair has grabbed headlines just as Japan kicks off its "Big Bang" reforms to make its financial markets "free, fair and global."


Nomura's new president, Junichi Ujiie, who assumed his post in May after a sweeping management shake-up, also pledged to cut off ties with sokaiya.


Police were out in force to help companies cope and domestic media said 86 racketeers showed up at 16 meetings.


Not all the questions asked related to scandals or even corporate strategy.


"You're red in the face -- are you OK? Have you been drinking," a rough-sounding man asked Junichiro Miyazu, president of telecommunications giant Nippon Telegraph and Telephone Corp., or NTT. Questions from that one investor ate up 30 minutes out of the meeting's total hour and 45 minutes. "It cost me 500 yen [$4] to travel to this meeting, but there are no souvenir gifts. Why not?" another NTT shareholder asked.