It highly incentives firms not to cooperate or collude with organized crime, much as the revisions to the commerce law in December 1997, made it unacceptable for large listed companies to pay off sokaiya
([TEXT NOT REPRODUCIBLE IN ASCII]), a/k/a racketeers.
We suggest that the sokaiya
are willing to engage in prima facie economically irrational derivative actions because such litigation enhances their reputation for extortion, which ultimately provides them with indirect economic gains.
Even though shareholder meetings of Japanese companies have been historically friendly and quiet, they have also contended with professional disrupters, known as sokaiya
, who demand hush money from corporations involved in scandal.
This practice used to be the norm because companies said they wanted to limit the effect of sokaiya
, or corporate extortionists who disrupt shareholders meetings, but today, more companies are scheduling their meetings at different times.
paying off sokaiya
or bribing government officials), and even in those cases the settlement amounts were for a small fraction of the plaintiffs' claim.
(literally, "general meeting operator") is usually a nominal shareholder who either attempts to extort money from a company's managers by threatening to disrupt its annual shareholders' meeting with embarrassing or hostile questions, or works for a company's management to suppress dissent at the meeting.
The executive gave 86 million yen to the two sokaiya
to ensure they did not disrupt Kubota's shareholders' meetings, a court ruled.
are often paid off by companies not to disrupt their shareholders' meetings by making public embarrassing or damaging information.
In accordance with recommendations from the authorities last spring, we have moved to end relations with firms associated with sokaiya
racketeers," said Toyota.
Most Japanese corporations hold their annual meeting on the same day to prevent shareholder attendance, and some firms pay individuals (called sokaiya
or professional extortionists) to ensure smooth flowing meetings by, for example, "shouting down and threatening shareholders who question the company's management.
In 1997, another scandal, in which Nomura was found to have provided benefits to a sokaiya
racketeering group, gripped Nomura, leading to his questioning by prosecutors.
73) Due to the strong emphasis in Japan on saving face, Japan proved to be a fertile ground for extortion and blackmail, and a vast industry of yakuza corporate racketeers, called sokaiya
, developed around Japan's largest companies.