In Japanese politics, the revelation in 1988 that a number of politicians and business leaders had profited from insider trading. It led to the resignation of several cabinet ministers, including Prime Minister Takeshita, whose closest aide committed suicide, and to the arrest of 20 people. It set in motion the breakaway from the ruling Liberal Democratic Party (LDP) of important factions in 1993 to form the nucleus of the new Shinshinto (New Frontier Party) opposition force.
Recruit is an information-publishing conglomerate with property and telecommunications interests. 17 senior politicians and 150 business leaders and other prominent individuals were offered bargain-priced shares in Cosmos, a Recruit subsidiary, a month before they were listed for public sale in 1986. Share prices rose sharply after their public offering, and shareholders made, on average, tax-free profits of 66 million yen. Another 30 MPs, mostly involved in education and labour matters, accepted favours from Recruit. Politicians of all the major parties were tainted by the scandal, notably the ruling Liberal Democratic Party. The leader of the Democratic Socialist Party was forced to resign.
Recruit's founder and managing director were among those charged with bribery. Another Recruit executive was caught trying to bribe a member of parliament to stop the inquiry.
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