Payments to racketeers, and a settlement that conceded the shareholders’ case (1997)

When “I was not told” stops working

The weight of this settlement lay less in the sum paid than in how responsibility was written down. When scandal breaks at a Japanese company, the top of the house has often explained it away — general affairs did it, the officer in charge did it — and stepped clear. Takashimaya’s settlement terms closed that exit directly. It left no precedent as case law, but in substance the plaintiffs’ claims were nearly all upheld, and it was received as a warning against a culture of irresponsibility at the top.

The company’s promise to open its shareholder meetings was also without precedent at the time. Relations with sokaiya had rested in part on keeping the meeting a closed room; agreeing to let outside eyes in dismantled that premise, a measure that reached into the structure rather than merely returning the money. Building an institution and keeping it working are, of course, different problems. Whether this settlement truly changed the way companies are run has gone on being asked through the corporate-scandal history of Japan ever since.