Japan's "richest man" takes another fall

[Mulboyne]

Yomiuri Shimbun: Tsutsumi to quit over stock irregularities
Yoshiaki Tsutsumi, chairman of Kokudo Corp., the Seibu Railway Group's core business, said Wednesday he would resign from all the positions he held within the group to take responsibility for Kokudo having providing shareholders with incorrect information for a long time... In the revised financial statement, the ratio of Kokudo's stake in Seibu Railway was revised upward to 64.83 percent from 43.16 percent, and Kokudo was listed as Seibu Railway's parent company and not an affiliated company as previously stated.
Tsutsumi will also step down as owner of the Seibu Lions professional baseball team after the Japan Series, and will submit a letter to the Japanese Olympic Committee resigning as honorary president of the committee...more...
The Brothers : The Hidden World of Japan's Richest Family
by LESLEY DOWNER

Yoshiaki Tsutsumi, whose assets are variously estimated to be between $9 billion and $22 billion [1995], owns a sixth of all the land in Japan, and...has been a powerful player in Japanese politics. His brother, Seiko, an accomplished writer, was less favored, inheriting a relatively small portion of the Tsutsumi estate; but he also built a business empire...more on Amazon...

[Mulboyne]

This is turning into a big story but I don't think the foreign press is picking up on the panic signs in Japan.
Shukan Post via Japan Today: Once-mighty Seibu group crumbles

Forbes magazine once listed Yoshiaki Tsutsumi, former leader of the Seibu Group, on its billionaire list as the richest man in the world. However, one fatal mistake in business has led to a fiasco and Tsutsumi's resignation. Now, the Seibu Group is facing possible insider trading charges. His real reasons for tendering his resignation are still unknown.
The police and Prosecution Office could not begin an investigation into Tsutsumi due to his enormous power both in business and politics. Now, they can and are trying to expand their investigation, which is shaking the Japanese political town, Nagtata-cho, as well.

The Seibu group is another debt mountain but, unlike Daiei, the credit quality of the company has generally not been called into question because of the assets backing the debt. However, now that the share price has collapsed those assets are open to doubt. If Seibu cannot remain a listed company, we could be in freefall. Mizuho is Seibu's main bank.
Curiously, there was a forewarning of problems at Seibu during the baseball dispute. The catalyst for that was the decision by Kintetsu to stop backing the Buffaloes. At the time, there was widespread speculation that a second team backer would throw in the towel and most observers assumed that this was the Daiei Hawks. However, back in July, Tsutsumi shocked everyone by suggesting that Seibu would at least look for a merger partner. Back then some began to ask whether there was anything up with the Seibu Group. Looks like there was.

[Skankster]

-
-
Masayoshi Son, CEO of Softbank is Japan's "richest man"

[dimwit]

-
-
Masayoshi Son, CEO of Softbank is Japan's "richest man"

You are talking about people whose wealth is well recorded. The Tsutsumis live in a murky land mostly beyond the law and as to what there assets are is is just about anyone's guess.

[Mulboyne]

Masayoshi Son, CEO of Softbank is Japan's "richest man"

It's just too difficult to tell but Son does have a pretty good case. Saji of Suntory was picked up by one of the local magazines (I forget which one) in May. One of the problems in Japan is identifying what are company assets and what are individual assets. The Forbes list is always heavily weighted towards owners of public companies where the main asset is the shareholding of the company (Softbank, Sarakin, Nintendo, Aruze etc etc) or high profile real estate investors where you can use the land price surveys or tax assessment values (the Moris). This is easy to assess and transparent. But there are a number of billionaire families in Japan with no profile at all where the wealth is in unlisted assets and, mostly, land. Also, these dynasties tend to be quiet conservative and have little debt which, on a, net basis, makes them "richer". Personally, I don't think a net calculation is relevant but it does give a few clues about how secure the wealth is.
One thing seems certain, though, Son is young enough not to need to split his fortune or worry about inheritance tax for a while whereas a number of older Japanese fortunes will go the way of the Kennedy family money and get divided among the heirs.

[Buraku]

:P Rich Japanese !!

Although Nippon could boast how rich it was during the 70s and 80s , htey could flash their cash at a few European nations and spend their money on big shopping ventures where they bought almost everything in the US
nowdays the Japanese have F^ck all to be happy about, a dying pension system, massive debts and a crummy economy


Nowdays we're all Gettin to travel a bit and I'll tell you the Japanese today have F&ck all left, rising suicide rates, a concrete slum and a useless stock market. The S Koreans seem to be doing ok, many European countires have grown and increased production in the past years, while China is gaining speed rapidly. Japan and Koizumi inc however can't pull itself away from corruption and the endless recession

There may be a lot of poor places around the globe but look at nippon it ain't exactly rich the majority have become a sub-middle class and the system is starting to fail.
I've often meet richer and more wealthy people in backwater places like Malaysia , Yemen and Russia

Japan a lost cause, check it out

http://news.bbc.co.uk/1/hi/business/2193853.stm
http://forum.japantoday.com/fb.asp?m=112243&key=
http://www.japan-guide.com/forum/disreadisplay.html?0+12292
http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?fl20030311zg.htm

[Captain Japan]

The Seibu group is another debt mountain but, unlike Daiei, the credit quality of the company has generally not been called into question because of the assets backing the debt. However, now that the share price has collapsed those assets are open to doubt. If Seibu cannot remain a listed company, we could be in freefall. Mizuho is Seibu's main bank.

When you say "we" and "freefall" do you mean Seibu could drag down Mizuho and force it into a Resona-like situation?

[Captain Japan]

On the bright side...
Lions are pride of Japan after Game 7 win

NAGOYA (AP) Takashi Ishii went six strong innings and Alex Cabrera hit a two-run homer Monday as the Seibu Lions defeated the Chunichi Dragons 7-2 in Game 7 of the Japan Series to win their first championship since 1992.

Ishii gave up just three hits over six scoreless innings at Nagoya Dome as the Pacific League champion Lions won two straight on the road after being down three games to two in the best-of-seven series.

[Mulboyne]

When you say "we" and "freefall" do you mean Seibu could drag down Mizuho and force it into a Resona-like situation?

No-one wants to be too alarmist but this has happened quite quickly. if Seibu is in trouble (forget the baseball) then we are facing a Daiei at warp speed. With most zombies, we've got used to the idea that they are bust and we have had 10 years or so to think about a solution. If Seibu ends up bust then we have problems.

Well as you know in Japan it's very difficult to conduct proper negotiations if the result is not known in advance.

Exactly right.

No. Mizuho isn't bust but the idea that we know all the basket cases is seriously in question.

[Mulboyne]

Kyodo via Japan Today: Banks begin probes into Seibu

TOKYO — Banks that have provided loans to Seibu business group companies, including group leader Kokudo Corp, have launched probes into the quality of their assets, financial sources said Tuesday.

The investigations follow the revelation that Kokudo, an unlisted firm that runs a hotel chain and sports facilities, and some other group companies such as Seibu Railway Co have given false information about stockholders in their financial statements. (Kyodo News)

[dingosatemybaby]

Tsustumi Yoshiaki also owns the Prince Hotel chain. Ever notice how every Prince Hotel seems to be surrounded by either a golf course or a humongous garden (e.g., the Shinagawa Prince Hotel)? The Tsutsumi family bought land on the cheap from has-been Japanese aristocrats after WWII and now own some astonishing proportion of the Japanese landmass. Tsutsumi Yoshiaki certainly seems to own most of the land in Karuizawa, and no doubt greased many-a-palm to bring the Olympics - with consequent Shinkansen line and other infrastructure boondoggles - to Nagano in 1998. Actually, he owns a little mountain next to my house, where he's got a villa and heliport.
-dingo
-filled with envy

[Taro Toporific]

The Tsutsumi family bought land on the cheap from has-been Japanese aristocrats after WWII ...Actually, he owns a little mountain next to my house, where he's got a villa and heliport.

Kool.
Do you wanna a few of my old Cadillacs to put up on blocks in your yard to create enough of an eyesore that Tsutsumi will have to buy you out?

[dingosatemybaby]

The Tsutsumi family bought land on the cheap from has-been Japanese aristocrats after WWII ...Actually, he owns a little mountain next to my house, where he's got a villa and heliport.

Kool.
Do you wanna a few of my old Cadillacs to put up on blocks in your yard to create enough of an eyesore that Tsutsumi will have to buy you out?

In a nanosecond! I could use them as kennel space for the sleazy dog-breeding operation I plan to start.

[Taro Toporific]

I could use them as kennel space for the sleazy dog-breeding operation I plan to start.

Shhhhhh, don't be giving away the most viable business plan ever uttered on the FG. (You could use anime-freakeziods as slave labor who would pay to homestay in Japan while they scoop the poop at Dingos Puppy Ranch and Korean BBQ.)

[Mulboyne]

Kyodo via Japan Today: Nippon TV corrects info on Yomiuri chairman's stake

TOKYO — Nippon Television Network Corp said Friday it has corrected its financial statements as shares reported as held by Tsuneo Watanabe, chairman of Yomiuri Shimbun Group Honsha, actually belong to the holding company of Japan's largest mass-circulation daily's business group, adding the practice has been in place for more than 30 years. The network has submitted revised financial reports to the Kanto Local Finance Bureau because it found the incorrect information during a recent check following revelations that Seibu Railway Co underreported equity stakes held by major shareholders, Nippon Television officials said. (Kyodo News)

This 30 year "practice" is clearly fraudulent. The fall-out from the Seibu news is spreading quite nicely now. Interestingly, the Shukan Post spotted this anomaly two months ago in the article entitled"How did Giants owner Watanabe make his money?"

Watanabe's total assets exceed 27 billion yen. Yet, he was not born to a rich family. After graduating from the University of Tokyo, Watanabe joined Yomiuri. As a political news reporter, he was acquainted and established close ties with the powerful ruling party's politicians, including late Prime Minister Ichiro Hatoyama. He was promoted quickly and reached the top of the newspaper publishing company.

However, it is very unusual for a reporter to accumulate such huge wealth. How did he accomplish this?

Most of Watanabe's wealth derives from his ownership of stocks of the Japan TV Network Corp (JTNC) [They mean NTV]. He owns 1.61 million shares of JTNC, which is equivalent to 6.3% of the total outstanding stock of the corporation. The present value of Watanabe's total JTNC stock is more than 26.5 billion yen.

The question is how he financed the acquisition of this stock?

Shukan Post's investigation has found that his stocks were handed down from previous chairmen of the JTNC. Risaku Mutai, a legendary chairman of Yomiuri, had 640,000 to 770,000 shares of JTNC stock. When he died, Okisannji Kobayashi, the son-in-law of another legendary chairman Matsutaro Shyoriki, transferred the stocks. When Kobayashi passed away in December, 1999, his stock was transferred to Watanabe.

Another question is whether such a stock transfer is legal. Tatsuo Uemura, a law professor at Waseda University, said, "It is totally impossible that Watanabe could have arranged financing to acquire such a huge amount of stock. If Kobayashi simply transferred those stocks to Watabane, he would have to pay an enormous amount of transfer tax. I can't imagine how he resolved the tax problem."

The Japanese Security Trade Law requires a person, who acquires more than five percent of the stock of any corporation, to report such a transaction to the government. However, Shukan Post has been unable to find such a report made by Watanabe at the Kanto Financial Bureau, the government oversight body for such transactions in the Tokyo metropolitan area

[Captain Japan]

Raising some cash...
Scandal-hit Kokudo decides to sell Seibu Lions ballclub: Nikkei

Kokudo Corp., a scandal-hit unlisted firm that operates the Prince Hotel chain and sports facilities, has decided to sell the Seibu Lions pro baseball team for 20-25 billion yen, a Japanese business daily reported Saturday.

The Nihon Keizai Shimbun said Kokudo has already approached at least two or three potential buyers with an offer to sell Seibu Lions Inc., a wholly owned unit of Kokudo.

The news tonight was saying that Livedoor is interested.

[Mulboyne]

This Kyodo story confirms that Seibu/Kokudo knew the game was up pretty quickly

TOKYO — Kokudo Corp, reeling from a string of financial scandals, approached TV Asahi Corp. with an offer to sell the Seibu Lions pro baseball team in addition to other potential buyers, broadcaster executives said Sunday.
The executives indicated Kokudo, the owner of Seibu Lions Inc, contacted TV Asahi before Oct 13, when it admitted to falsifying financial statements about its stake in Seibu Railway Co. The executive also suggested the broadcaster is not likely to accept the offer to purchase the ballclub. (Kyodo News)

TV Asahi hasn't got the dough. If Softbank gets the Hawks then the only serious buyer will likely be Livedoor. The Asahi says

A sticking point appears to be price. Kokudo was asking 20 billion yen for the ball club, sources said. In 2002, the Tokyo Broadcasting System, Inc. paid about 14 billion yen for a 54 percent stake in the Yokohama BayStars. However, the Lions are in the less popular Pacific League, where the clubs annually run deficits in the billions of yen...Livedoor sources said 20 billion yen was beyond what the company could afford. One Livedoor official said the company could not consider paying more than 10 billion yen. ...Sources said the Lions annually run an operating deficit of between 2 billion and 3 billion yen.

[Captain Japan]

If Seibu cannot remain a listed company, we could be in freefall. Mizuho is Seibu's main bank.

Just in time for Christmas...
Tokyo Stock Exchange to delist Seibu stock on Dec. 17

The Tokyo Stock Exchange (TSE) officially decided on Tuesday to delist the stock of scandal-tainted Seibu Railway Co. on Dec. 17 for having falsely stated the ratios of stakes major shareholders have held in it for over 40 years, officials said.

Prior to the decision, the Seibu Railway share price plummeted sharply on Tuesday to close at 268 yen, down 57 yen from Monday and about one-fourth of its price before the scandal came to light.

[Captain Japan]

Kokudo, Seibu offices searched
Asahi

The government's Securities and Exchange Surveillance Commission (SESC) on Thursday searched the offices of Seibu Railway Co. and its parent firm, Kokudo Corp., over false shareholder statements in the railway company's financial report, sources said.

It is the first time the SESC has searched the offices of Seibu group companies, the sources said. Both Seibu and Kokudo agreed to let the SESC conduct its searches.

The SESC is also looking into whether Kokudo's sale of Seibu Railway shares just before the scandal became public constitutes insider trading. The companies that bought the shares said they were not aware of the false statement in Seibu Railway's financial report.

[Captain Japan]

Kokudo sold Seibu Railway shares for 65 bil. yen
Kyodo

Kokudo Corp., at the center of a scandal involving questionable sales of Seibu Railway Co. shares, said Thursday it sold the shares to nearly 70 companies for 65 billion yen in August and September.
Answering questions from Kyodo News and other media, Kokudo said in a statement that about 40 companies have demanded that it buy back the shares.

The companies, including some Seibu group firms, bought Seibu Railway shares at Kokudo's request before the announcement Oct. 13 that the company had underreported its shareholdings in Seibu Railway.

The failure of Kokudo, an unlisted firm that operates hotels and sports facilities, to explain about the equity ownership conditions could be interpreted as insider trading, a violation of the Securities and Exchange Law.

On its holding some of its shares in Seibu Railway under individuals' names, Kokudo said the practice started at least about 80 years ago as Seibu Railway expanded its operations through mergers. It says it sees no clear reason for the practice.

Kokudo is Seibu Railway's largest shareholder, with a 48.6 percent stake.

Seibu Railway will be delisted from the Tokyo Stock Exchange on Dec. 17 over its long-running practice of underreporting the ratio of stakes held by Kokudo and other major shareholders.

Since Seibu's shares have plunged since then I would guess there is a huge debate about at what price Kokudo will buyback the shares.

[Mulboyne]

[Mulboyne]

Japan Times: Seibu group considers end to North America operations
The scandal-tainted Seibu business group needs to consider pulling the plug on money-losing operations in Hawaii and North America, the chairman of an advisory panel to the group said Friday.
Hotel and ski resort operations undertaken by the Seibu group in Canada and Alaska are "in a substantially difficult situation," as are the hotel business and realty sales operations in Hawaii, Ken Moroi told a news conference after the panel met to discuss how to reorganize the group.

[Captain Japan]

Kokudo to void Seibu stock transactions
Japan Times

Kokudo Corp. is willing to void stock transaction deals worth 62 billion yen with about 70 firms that bought Seibu Railway Co. shares without knowing that Seibu had underreported shareholder ratio figures, company sources said Wednesday.

Forty of the firms have demanded that the deals be nullified, and Kokudo is prepared to return the money, the sources said. The remaining companies will be able to cancel their contracts if they want, they said.

[Captain Japan]

Seibu group execs thought to have systematically sold railway shares
Kyodo

(Kyodo) _ Seibu Railway Co. group executives are suspected of systematically selling company shares held by its parent firm Kokudo Corp. before a false financial report scandal came to light in October, a Kyodo News survey showed Wednesday.

According to the survey covering 72 companies and two individuals who bought a total of 65 billion yen in Seibu Railway shares in August and September, former Kokudo Chairman Yoshiaki Tsutsumi sold up to 3 billion yen shares to a buyer.

Tsutsumi's close aide Toshiyuki Shirayanagi, who served as Seibu Railway managing director, got rid of 2.3 billion yen in shares to a company, while executives of Seibu group companies also sold shares worth up to 100 million yen each to corporate buyers with whom they have business dealings.

Those senior officials are thought to have disposed of the Seibu Railway shares held by Kokudo at Tsutsumi's direction before the railway operator's announcement Oct. 13 that the company had underreported the ratio of stakes held by its major shareholders.

Among the 72 companies, Tsutsumi approached Odakyu Electric Railway Co., Japan's largest whiskey maker Suntory Ltd., Oji Paper Co. and Hitachi Ltd. Hitachi bought 2.4 million Seibu Railway shares worth 2.6 billion yen, while the three others separately bought 2.6 million shares worth 3 billion yen, according to the buyer companies.

Shirayanagi, a licensed architect who once served as a planning manager for hotels and golf courses, asked general contractors and electric engineering companies to purchase the Seibu Railway shares.

Contractor Taisei Corp. bought 2 million shares of the railway company for 2.3 billion yen, while electric facility construction firm Kinden Corp. purchased 100,000 shares worth 100 million yen after being approached by Shirayanagi.

[Captain Japan]

Seibu chief played key role in cover-up of cooked books
Mainichi

Yoshiaki Tsutsumi, former head of the scandal-tainted Seibu group, played a key role in covering up a false entry in its financial statement before selling Seibu Railway Co. shares, sources close to law enforcers said.

"Former Chairman Tsutsumi and others delayed the announcement of the problem until they had sold shares to firms with which they had business relations," one of Seibu group insiders was quoted as telling Securities and Exchange Surveillance Commission (SESC) inspectors.

The SESC has launched a full-scale investigation into the allegations in a bid to file a criminal complaint with prosecutors, accusing Tsutsumi and his top aides of insider trading in violation of the Securities and Exchange Law.

In early August last year, an auditor of Seibu Railway Co. found that company shares held under the names of 1,212 individuals are actually owned by Kokudo, the key company in the group, and Prince Hotel, also a member of the group, according to the sources.

[Captain Japan]

BizTrend: Seibu group facing worst crisis with Tsutsumi's departure
Kyodo

With the departure of Yoshiaki Tsutsumi from the Seibu Railway Co. group following a series of damaging scandals involving it and resultant police investigations of its officials, the group is facing its worst crisis since it was founded after World War II.

The group's hotels, golf courses and other leisure facilities are standing at a crossroads, and some of them will be forced to shut down, business analysts said.

In mid-1990, then Miyazaki Gov. Suketaka Matsukata asked Tsutsumi, who was a close acquaintance, to buy Cape Toi, a grazing land for wild horses in the southern part of the prefecture overlooking the sea.

"Why don't you buy the whole of the cape? It is 500 hectares wide and priced at 1 billion yen," Matsukata told Tsutsumi, who replied, "It can be bought with pocket money."

But the planned purchase came to nothing due to opposition from some landowners. "It was Seibu's strategy to connect southern Kyushu with facilities in Kumamoto and Kagoshima. We pinned hopes on development funds for a hotel and a golf course totaling 10-20 billion yen, which could restore tourism in Toi," Matsukata recalled.

[Captain Japan]

Ex-Seibu chief Koyanagi found hanged
Gomuri Shimbun

Former Seibu Railway Co. President Terumasa Koyanagi was found hanged at his home in Machida, Tokyo, on Saturday, police said.

His wife found Koyanagi, 64, dead when she returned home shortly before 1 p.m.

The Machida Police Station believed he committed suicide because a note was left addressed to his family.

The Tokyo District Public Prosecutors Office is currently investigating the railway company on suspicion of false securities reports and insider trading in connection with a scandal over falsification of details related to the ownership of shares.

Koyanagi had been questioned by prosecutors over the issue.

According to sources close to the company, Koyanagi had been questioned almost every day since the beginning of the month. On Friday, he was questioned by the prosecutors until around 8 p.m.

Though questioning was not scheduled for Saturday, he was slated to meet the prosecutors again Sunday.

Between 1957 and 2004, Seibu Railway underreported in securities reports the number of shares owned by Kokudo Corp. Kokudo, a large shareholder in Seibu Railway, falsely reported the shares were owned by individuals.

Former Kokudo Chairman Yoshiaki Tsutsumi and his colleagues sold Seibu Railway shares to client companies between August and October last year before announcing the issue of false ownership.

As then president of Seibu Railway, Koyanagi is likely to have known details about the process of falsifying a securities report that was submitted in late June last year.

The prosecutors mainly demanded an explanation of the reporting process from him.

Koyanagi's death will have an impact on the investigation, sources said.

Koyanagi joined the Transport Ministry in 1964, and resigned after serving as head of the information management department of the policy bureau. After working as a director of the Light Motor Vehicle Inspection Organization, he joined Seibu Railway as a managing director in 1993.

Koyanagi became president in April after a stint as senior managing director, succeeding Hiroyuki Toda, who resigned to take responsibility for a scandal which surfaced in March that revealed the company had given benefits to sokaiya corporate racketeers.

On Oct. 13, Koyanagi and Tsutsumi together explained the details of the ownership falsification when Seibu Railway made the problem public.

On Jan. 28, Koyanagi resigned because a new line-up of top executives was drawn up after reorganization of the Seibu group.

In November a deputy head of Kokudo's general affairs department in charge of stocks, then 54, was found dead on a beach in Yamagata Prefecture after he was questioned by the Securities and Exchange Surveillance Commission in relation to the Seibu Railway share ownership falsification.

[Captain Japan]

I'm impressed with the recent criticisms the Asahi has had of both Seibu and NHK. Nobody else seems to give a shit one way or the other...
EDITORIAL: Tsutsumi's disgrace
Asahi

He should sever all ties to the Seibu group.

Yoshiaki Tsutsumi, the real estate magnate who ruled the Seibu Railway Co. group for decades, has been questioned by prosecutors over a scandal involving falsified documents. Investigators are looking into allegations that the railroad company continued to report the shareholding ratios falsely for many years while it was listed on the Tokyo Stock Exchange.

When he controlled the Seibu conglomerate, Tsutsumi held sway over the Japanese sports community. He was president of the Japanese Olympic Committee and the owner of the Seibu Lions professional baseball club. He also wielded both direct and indirect clout within the political circles.

Fortune magazine once described Tsutsumi as one of Japan's most powerful corporate bosses, along with the likes of Isao Nakauchi, the founder of Daiei Inc. For a while, Tsutsumi was a fixture on the list of the world's richest men....the rest...

[Captain Japan]

LEAD: Tsutsumi expected to be arrested Thurs. over Seibu share scam
Kyodo

(Kyodo) _ Tokyo prosecutors are expected to arrest Yoshiaki Tsutsumi, former Seibu Railway Co. and Kokudo Corp. chairman, on Thursday on suspicion of making false statements about shareholdings in Seibu Railway and committing insider trading, sources close to the case said Wednesday.

While arresting Tsutsumi, 70, a high-profile Japanese businessman, on the two counts, both of which are violations of the Securities and Exchange Law, the Tokyo District Public Prosecutors Office also plans to raid related locations, including the headquarters of Seibu Railway and Kokudo, the sources said.

Prosecutors, who so far have questioned Tsutsumi and some other Kokudo and Seibu Railway officials on a voluntary basis, plan to continue investigating the other officials without arresting them for the time being, the sources said....the rest...

This always baffles me. How can you raid someone and make it public beforehand? The paper shredders are probably probably good and warm by now.

[GuyJean]

LEAD: Tsutsumi expected to be arrested Thurs. over Seibu share scam

It's official..

Property Tycoon Tsutsumi Arrested
http://edition.cnn.com/2005/BUSINESS/03/02/japan.tsutsumi.reut/index.html

Prosecutors arrested Japanese railway and property magnate Yoshiaki Tsutsumi, once the richest man in the world, on Thursday on suspicion of making false financial statements and insider trading, media reported.

Tsutsumi, 70, former chairman of Seibu Railway group firm Kokudo Corp., is suspected of approving the falsification of financial statements by Seibu Railway and of approving the sale of its shares before the scandal was revealed.

The Tokyo District Public Prosecutors Office declined to comment.

Listed as the world's richest man by Forbes magazine for four years from 1987, Tsutsumi has had close ties with Japanese ruling party politicians.

Asked about Tsutsumi's arrest during debate in a parliamentary panel, Prime Minister Junichiro Koizumi said: "I will refrain from commenting as this is an individual case, but I have been closely acquainted with him."

Adding, "Yeah, we always perform bukkake parties on the Japanese people.. It's cool.. Because they're cool with it."

GJ