SCAPIN-1238: SUPPLEMENTARY REGULATIONS AFFECTING RESTRICTED CONCERNS
GENERAL HEADQUARTERS
SUPREME COMMANDER FOR THE ALLIED POWERS
APO 500
28 September 1946
AG 004
(28 Sep 46)
ESS/AC
(SCAPIN-1238)
| MEMORANDUM FOR | IMPERIAL JAPANESE GOVERNMENT. |
|---|---|
| THROUGH | Central Liaison Office, Tokyo. |
| Subject | Supplementary Regulations Affecting Restricted Concerns. |
1. References are the following Memoranda for the Imperial Japanese Government from General Headquarters, Supreme Commander for the Allied Powers:
a. AG 004 (8 Dec 45) ESS/AC, 8 December 1945, (SCAPIN-403), subject: “Establishment of a Schedule of Restricted Concerns.”
b. AG 300.8 (8 Dec 45) ESS/AC, 8 December 1945, (SCAPIN-408), subject: “Regulations Affecting Restricted Concerns.”
2. The Imperial Japanese Government will take the necessary action to assure that, unless prior approval is obtained from the Supreme Commander for the Allied Powers, none of the following will directly or indirectly acquire any interest in or directly or indirectly participate in the management of any non-restricted concern:
a. Any concern listed on the Schedule of Restricted Concerns established by reference Memorandum 1a, above.
b. Any non-restricted subsidiary of a Restricted Concern.
c. Any other concern of individual controlled by a Restricted Concern or a non-restricted subsidiary of a Restricted Concern.
3. a. “Directly or indirectly acquire any interest” is defined to include, but not be limited to, acquiring any interest in any non-restricted concern through the directors, officers or other employees of a Restricted Concern, or through a non-restricted subsidiary of such Restricted Concern or the directors, officers or employees of such non-restricted subsidiary or through any other concern or individual controlled by such Restricted Concern or non-restricted subsidiary or the directors, officers or employees of such other concern. “Any interest” shall mean any shareholdings, indebtedness, certificates of indebtedness or other device through which any control over such other non-restricted concern is exercised or ownership of ten (10) per cent or more of the shares of such other non-restricted concern.
b. “Directly or indirectly participate in the management” is defined to include, but not be limited to, any agreement or understanding between:
(1) A Restricted Concern, or the directors, officers or employees of such Restricted Concern, or
(2) A non-restricted subsidiary of a Restricted Concern, or the directors, officers or employees of such subsidiary, or
(3) Any other concern or individual controlled by a Restricted Concern or a non-restricted subsidiary thereof, or the directors, officers of employees of such other concern,
and: any other non-restricted concern whereby such Restricted Concern or non-restricted subsidiary thereof or such other concern or individual controlled by such Restricted Concern or non-restricted subsidiary participates in the management of such other non-restricted concern or exercises any control over the sales or production of such other non-restricted concern.
4. The Imperial Japanese Government will take the necessary action to assure that any concern or individual referred to in subparagraphs 2a. b. and c. above, will, within thirty (30) days from the date of this Memorandum, submit plans to the Supreme Commander for the Allied Powers for the termination of any interest or participation as defined in subparagraphs 3a and b, above, if such interest or participation was acquird on or after 8 December 1945.
5. Direct communication is authorized between the interested Staff Sections of General Headquarters, Supreme Commander for the Allied Powers, and agencies of the Imperial Japanese Government concened to implement all provisions of this Memorandum.
FOR THE SUPREME COMMANDER:
JOHN B. COOLEY,
Colonel, AGD,
Adjutant General.
MEMO FOR RECORD : (SCAPIN - 1238)
WFM/JMcIH/ITB/gg
22 August 1946
1. SCAP Memorandum AG 300.8 (8 Dec 45) ESS/AC (SCAPIN-408), subject: "Regulations Affecting Restricted Concerns," was drafted with the object of preventing further expansion of the influence of Restricted Concerns over industry and trade in Japan. The concerns listed on the Schedule of Restricted Concerns established pursuant to AG 004 (8 Dec 45) ESS/AC (SCAPIN-403), subject: "Establishment of a Schedule of Restricted Concerns," include "Zaibatsu" concerns and other major holding companies and combined holding companies and operating companies and their first line subsidiaries.
2. In many cases these first line subsidiaries, especially of holding companies are as large or larger than the parent company and also have many subsidiaries which are not listed as Restricted Concerns.
3. There is good reason to believe that second line non-restricted subsidiaries are being used to evade the object and intent of the "Regulations Affecting Restricted Concerns," above. For example, a recent communication intercepted by Civil Censorship Detachment of CIS, GHQ, APO 500, between the head offices of Mitsubishi Trading Company, Ltd., a Restricted Concern, and its branch office in Niigata, contained a circular in which the following in gist was stated: "... Long desirous of pushing our business into the field of fishery and foodstuff refrigerating industry, and with the timely proposal as well as the cooperation of Mr. Amano Gunji, ex-managing Director of CHOSEN SUISAN KAIHATSU KABUSHIKI KAISHA (Korea Marine Products Development Co., Ltd.), in which our firm has ¥1,860,000 invested, we have organized TAISEI SUISAN KABUSHIKI KAISHA (Taisei Marine Products Co., Ltd.) to undertake fishery, its transportation and processing work in SHIMONOSEKI, Yamaguchi Prefecture. The authorized capital of this new enterprise is ¥2,000,000 of which 90% has been subscribed by KABUSHIKI KAISHA HOKUYO SHOKAI (North Ocean Co. Ltd.), and the rest by the above-mentioned Mr. Amano and his partners. Please take note that as our firm is a restricted concern, we have availed ourselves of the said HOKUYO SHOKAI to invest in the new company. The Board of Directors is to be composed of influential officials, of our firm and it has been decided that Mr. KANDA, ex-Manager of our SEOUL Branch, Korea, is to be President, and as to other important posts of the new company, most reliable persons will be furnished from our side, and to Mr. Amano and his party will be entrusted fishery operation. After all the real power of administration of this new organization will entirely be in our hands. . ."
4. The use of a second line subsidiary in this manner violates both the spirit and intent of SCAP Memorandum "Regulations Affecting Restricted Concerns," above. It is not, however, a violation of the terms of said Memorandum. The attached directive will prohibit evasive action such as this and also compel those who have indulged in such evasive action, since said Memorandum was issued, to cease and desist forthwith.
5. This is an administrative matter and no surveillance by the Eighth Army is required.
6. The interests of USAFIK are not concerned.
7. Concurrences: ESS/LE (Major E. R. Minnich); ESS/IN (Mr. G. T. Walker).
CHIEF OF STAFF
Approved
J. McI. H.
9/20/46
Initials
