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Postwar60: Seibu's shareholding methods turn into minefield.

TOKYO, Jan. 13 Kyodo

(EDS: THIS IS THE SECOND OF THREE POSTWAR60 FEATURE STORIES ON SEIBU BUSINESS GROUP)

On April 21, 1964, Yasujiro Tsutsumi, the founder of the Seibu Railway group, collapsed in an underground passage at Tokyo Station and died five days later at age 75, but it took a whole day before his death was reported in the newspapers.

''The reason was discord between his wife Misao and (son) Yoshiaki over who should be the chief mourner,'' said an executive at Kokudo Corp., which has been effectively controlling the Seibu group.

Yoshiaki Tsutsumi, son of the founder, was Kokudo's chairman until he stepped down in October, giving up the post and others to take responsibility for intentionally issuing false official financial statements for more than 40 years.

When Yasujiro Tsutsumi died, the Seibu group had already grown into a mammoth conglomerate with railway, hotel and department store businesses, and the chief mourner would be the successor of the group.

Misao, his third wife, insisted her son Seiji should be the successor but those close to Tsutsumi knew his last wishes. ''Everybody knew apparently that our great boss had trained him for kingcraft,'' one person commented.

In anticipation of his death, Tsutsumi had prepared several things, including the choice of Yoshiaki as his successor and the individual ownership of Seibu Railway Co. shares by Kokudo, the core company of the group.

According to reports published by Seibu Railway, Kokudo has continued to own Seibu Railway shares under such a system since 1957, accounting for more than 70 percent of the total.

Why did the founder do this? Chusaburo Nakajima, a close aide to him and in charge of the inheritance problem, quoted him as saying in his book, ''Nothing will be left if my inheritance is distributed among all members of my family.''

Yasujiro Tsutsumi had five wives and had his marriage registered with three of them. He had seven children and feared his inheritance would be scattered and lost after he died.

Therefore, he decided to have Seibu Railway shares owned not by his family but by Kokudo in order to avoid a massive inheritance tax and prevent the group from disbanding by asset distribution.

There is another story about Yasujiro Tsutsumi's life as a businessman concerning his rival Keita Goto (1882-1959), the founder of the Tokyu business group.

''I have felt easy with Goto, because as I have tried to make him known to the world I thought he would never betray me,'' he wrote in his book, titled ''Thirty Years of Struggle.''

According to an aide to Tsutsumi, he at first favored Goto with his patronage but felt he was betrayed by Goto in 1936 when Goto began buying up Musashino Railway Co. (predecessor of Seibu Railway) shares.

In 1944, Goto tried to divide a Seibu Railway-affiliated railway company jointly with the then Railway Ministry.

Tsutsumi managed to tide himself over the difficulties, but fears of a buyout influenced his position, and he concealed all shares with individual ownership at his office in the Hiroo district of downtown Tokyo, his aides said.

Tsutsumi's policy of keeping such shares to prevent them from going on the stock markets turned into his son's policy of taking measures favorable to corporate racketeers and fixers of shareholders' meetings and of raising share prices to bring in latent profits.

But Japan changed from the Showa period, in which proprietorship was allowed, to the Heisei period, in which information disclosure has become important, and individual-registered shares have now turned from being Seibu's breakwater into a minefield.
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Publication:Japan Weekly Monitor
Date:Jan 18, 2005
Words:594
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