Japanese court convicts railway tycoon

A Japanese court convicted resort and railroad tycoon Yoshiaki Tsutsumi of insider trading and falsifying company records yesterday, slapping him with a fine of ?5 million (US$43,200) and a suspended prison sentence.

Tsutsumi, once ranked the world's richest man by Forbes magazine, had pleaded guilty to conspiring with several executives to falsify Seibu Railway's 2003 financial statement, putting the stake of Kokudo Corp, his privately owned company, in the railway far lower than actual numbers.

Tokyo District Court sentenced Tsutsumi to two years, six months in prison, suspended for four years.

Seibu was given a ?200 million fine, while Kokudo was fined ?150 million.

"Tsutsumi played a leading role in the crimes as the head of his company group. The impact on society of crimes committed by such leading Japanese companies is very serious," judge Tsutomu Tochigi said. "His responsibility for ignoring his social and legal obligations is also serious."

The falsification was an attempt to hide the fact that a handful of top executives owned too much of the railway -- a violation of stock trading rules -- to ensure the company could stay listed on the Tokyo Stock Exchange.

"Due to their significant social role and responsibility, corporations are required to have a high ethical standard and a commitment to a law-abiding spirit. Mere pursuit of corporate profit is not acceptable," the judge added.

Seibu, meanwhile, said it had learned its lesson from the trial.

"By promoting management reforms, we will strive to change into a company with greater transparency that can be trusted by society," Seibu president Takashi Goto said in a statement.

Kyodo News agency quoted Tsutsumi's lawyer as saying he would not appeal the sentence.

The trial highlighted a shift in Japan away from old-style insular management as the nation increasingly globalizes and attracts foreign investment.

Japanese companies have long been characterized by an old-boy network that largely neglected investors and consumers.

At the opening of the trial in June, Tsutsumi pleaded guilty to the charges and apologized.

In the era of Japan's postwar modernization, Tsutsumi developed a reputation for ruling over his empire of hotel chain, ski resorts, golf courses and professional baseball team, the Seibu Lions, with an iron hand. He also won respect as a charismatic billionaire with tremendous influence in Japan's political circles and sports.

Since his arrest in March, however, the Japanese media have portrayed him as a disgraced figure of the past.