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Japan Ministry To Punish Officials

April 22, 1998

TOKYO (AP) _ Japan’s Ministry of Finance said today it will punish more than 100 of its officials for being wined and dined by representatives of the businesses they regulate.

The ministry is investigating another 400 officials to determine if they too were entertained at the expense of private companies with which they have government dealings.

The nature of the penalties will be revealed soon, the ministry said, refusing to elaborate further.

Japanese bureaucrats long have accepted lavish attention from private companies. The practice is now at the root of a scandal involving accusations that regulators favored companies that courted them with expensive dinners and other treats.

A finance minister and another ranking official resigned earlier this year over the scandal, although they were not directly implicated. It is common in Japan for top officials of institutions to quit when subordinates have been accused of wrongdoing

Newspapers reported today that the scandal had claimed another casualty _ a ministry official who allegedly stepped down over claims he received expensive favors from insurance companies several years ago, when he was in a post overseeing that industry.

Ministry officials refused to confirm or deny the reports.

Earlier this month, Japan’s central bank punished 98 employees after conducting its own probe into whether officials had been wined and dined by private banks, brokerages and other financial institutions.

The bank’s penalties were mild, ranging from reprimands to temporary salary cuts.

On Tuesday, the ministry set up a 15-member advisory panel led by Ryuzo Sejima, former chairman of Itochu Corp., a major Japanese trading company, to study ways of reforming the ministry, ministry officials said.

The group is to come up with recommendations in three months.

Also today, Nissan Motor Co. said it sent a letter to 300 auto-parts makers and financial institutions proposing they refrain from exchanging gifts and entertaining each other.

Nissan, Japan’s second-largest automaker, would be the first among major Japanese companies to ban that customs, company spokesman Ryuichi Shikama said.

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