SCAPIN-1238/1: AMENDMENTS TO SCAPIN 1238: SUPPLEMENTARY REGULATIONS AFFECTING RESTRICTED CONCERNS
GENERAL HEADQUARTERS
SUPREME COMMANDER FOR THE ALLIED POWERS
APO 500
11 March 1949
AG 004
(28 Sep 46)
ESS/AC
(SCAPIN- 1238/1)
| MEMORANDUM FOR | IMPERIAL JAPANESE GOVERNMENT. |
|---|---|
| THROUGH | Central Liaison Office, Tokyo. |
| Subject | Amendments to SCAPIN 1238: Supplementary Regulations Affecting Restricted Concerns. |
1. Rescission:
a. Memorandum for the Japanese Government from General Headquarters, +Supreme Commander for the Allied Powers, AG 004 (4 Jul. 46) ESS/AC, SCAPIN 1053, 4 July 1946, subject: Changes in Names of Restricted Concerns, is hereby rescinded.
2. Reference the following memoranda for the Japanese Government from General Headquarters, Supreme Commander for the Allied Powers:
a. AG 004 (8 Dec. 45) ESS/AC, SCAPIN 403, 8 December 1945, subject: Establishment of a Schedule of Restricted Concerns; as supplemented and amended.
b. AG 091. 3 (23 Jul. 46) E.S/AC, SCAPIN 1079, 23 July 1946, subject: Ordinances and Regulations Affecting the Holding Company Liquidation Commission.
c. AG 004 (28 Sep. 46) ESS/AC, SCAPIN 1238, 28 September 1946, subject: Supplementary Regulations Affecting Restricted Concerns.
3. Reference memorandum 2c above is hereby amended as follows:
a. By adding and inserting the following wording to the first sentence of paragraph 2 thereof, between the words “will” and “directly” in the third line;
“change their names or”
b. By adding and inserting a new paragraph 4a after paragraph 4 therof, as follows:
“4a. The Japanese Government will take the necessary action to assure that the restrictions, prohibitions and directions contained in this memorandum shall be applicable to companies or concerns successor to Restricted Concerns, non-restricted subsidiaries of such Restricted Concerns, and other concerns or individuals controlled by such Restricted Concerns or their non-restricted subsidiaries; but that such restrictions, prohibitions and directions shall, as to Restricted Concerns, their non-restricted subsidiaries, other concerns or individuals controlled by them, and successor companies or concerns as above described, become inapplicable one year after the date that the Restricted Concern has been removed from the Schedule of Restricted Concerns.”
4. It is directed that the Japanese Government implement the subject memorandum by Cabinet Order amending and supplementing Imperial Ordinance No. 567 of 1946: On Restriction of Securities Holdings, etc. by Companies, Based upon Imperial Ordinance No. 542 of 1945 on Ordinances or Orders to be Issued as the Result of Acceptance of the Potsdam Declaration.
FOR THE SUPREME COMMANDER:
R. M. LEVY
Colonel, AGD,
Adjutant General.
MEMO FOR RECORD : (SCAPIN - 1238/1)
WFM/ECW/JR/It
26 February 1949
1. References are the following SCAP memoranda to the Japanese Government:
a. AG 004 (8 Dec 45) ESS/AC, SCAPIN 403, subject: Establishment of a Schedule of Restricted Concerns; as supplemented and amended.
b. AG 004 (4 Jul 46) ESS/AC SCAPIN 1053, subject: Changes in Names of Restricted Concerns.
c. AG 091. 3 (23 Jul 46) ESS/AC, SCAPIN 1079, subject: Ordinances and Regulations Affecting the Holding Company Liquidation Commission.
d. AG 004 (28 Sep 46) ESS/AC, SCAPIN 1238, subject: Supplementary Regulations Affecting Restricted Concerns.
2. Reference memorandum 1d provides generally that Restricted Concerns and companies controlled by them shall sever their intercorporate ties such as share holdings and management participation. This involves the disposal of the existing portfolios of such companies and permanently prohibits the future acquisition of all securities by them.
3. The program for the timely and gradual removal of control over the activities of Restricted Concerns, such as the recent abandonment of the requirement for prior SCAP approval in order to act outside the normal course of business, now indicates relaxation of the outright, permanent prohibition against future acquisition of securities.
4. The subject SCAPIN, therefore, has as its principal purpose the removal of such permanent prohibition and the substitution of a reasonable time limitation, after which Restricted Concerns and companies controlled by them may freely acquire securities, subject to no different restrictions than are imposed upon all other Japanese companies, such as the provisions of the Anti-Monopoly Law.
5. The expiration of one year after removal from the Schedule of Restricted Concerns is considered a reasonable time limitation. Since such removal will carry with it the removal of all companies controlled by the Restricted Company, the controlled companies should be provided with opportunity for a year of independent operation during which time their securities cannot be re-acquired by their former parent companies nor old Zaibatsu ties re-established.
6. The subject SCAPIN also serves to rescind reference memorandum 1b and to combine and collate it with the subject SCAPIN for complete coverage of Restricted companies and companies controlled by them. That portion of SCAPIN 408/2 (which is being rescinded by SCAPIN accompanying the subject SCAPIN), relating to applicability of Ordinance 567 to successor companies, is also hereby incorporated into the subject SCAPIN where it more properly belongs. This combination and collation will result in simplification and clarification of SCAP direction to the Japanese Government.
7. This is an administrative matter and no surveillance by the Eighth Army is required.
8. Concurrences: ESS/FIN - 25 February 1949.
J. Rand - 26-6664
E. C. W.
