MEMO FOR RECORD: (SCAPIN - 950)
6 May 1946
1. Pursuant to the policy set forth in Joint Chiefs of Staff Directive 1380/15, dated 3 November 1945, investigations are being made of concerns which are not on the Schedule of Restricted Concerns, established by SCAP Memorandum for the Imperial Japanese Government, AG 004 (8 Dec 45) ESS/AC (SCAPIN-403), subject: "Establishment of a Schedule of Restricted Concerns."
2. Showa Electric Industry Company, Ltd. (Showa Denko Kabushiki Kaisha) and subsidiaries listed below are placed on the Schedule of Restricted Concerns as a result of investigation disclosing the following information:
a. Description and History of Company:
(1) This Company was organized on 1 June 1939 with an authorized capital of \110,000,000. It resulted from the amalgamation of Japan Electric Industry Company, Ltd. (Nihon Denki Kogyo, K.K.) and Showa Fertilizer Company, Ltd. (Showa Hiryo, K.K.). In October 1943, it amalgamated with the Nichiman Aluminum Company, Ltd., and increased the capital to \122,000,000. In April 1944, the authorized capital was increased to \244,000,000, of which \152,500,000 was fully paid.
(2) Showa Electric Industry Company, Ltd., with total assets of \465,000,000 (unpaid capital of \91,500,000 excluded) is a prominent manufacturer of chemical fertilizer and aluminum. Surveys of the years 1940-1942 show that it produced 15% of Japan's total output of sulphate of ammonia (fertilizer); 22.9% of the calcium cyanamide (fertilizer), and 21.2% of the aluminum. Although accurate figures are not available, it is assumed that this percentage of production was at least maintained throught the remaining war years, as the company's capital was doubled in 1944.
(3) The largest single stockholder is the General Japan Chemical Industry, Ltd. (Dai Nihon Kagaku Kogyo K.) owning 8.23% of the shares, with the Wartime Finance Bank next, owning 8.04%.
(4) Long and short term liabilities amount to \269,423,000. Of this amount \115,000,000 represents debentures, and \109,000,000 short term loans. The Yasuda Bank, Ltd. granted \63,500,000 of the short term loans and the Industrial Bank of Japan \30,800,000.
b. Investments:
(1) As of 30 September 1945, Showa Electric Industry Company, Ltd., had investments totaling \42,529,375, which may be divided into two types:
(a) Investments of \38,411,500, in subsidiary companies.
(b) Investments of \4,117,375, in chemical control associations.
(2) Following is a list of subsidiaries in which Showa Electric Industry Company, Ltd., owns shares, and percentages of control as of 30 September 1945:
Subsidiaries Percentage of Control by Showa Electric Industry Company, Ltd.
Akazawa Coal Mining Company, Ltd. (Akazawa Tanko, K.K.) 38.8
Himekawa Electric Power Company, Ltd. (Himekawa Denryoku K. K.) 100.
Hokkaido Carbon Industry Company, Ltd. (Hokkaido Tanso Kogyo K.K.) 40.
Japan Abrasive Material Industry, Ltd. (Nippon Kemmazai Kogyo K.K.) 19.5
Japan Carbon Company, Ltd. (Nippon Kabon, K.K.) * 11.3
Japan Chemical Industry Company, Ltd. (Nippon Kako, K.K.)** 28.6
Japan Coke Industry Company, Ltd. (Nippon Coke Kogyo, K.K.) 50.
Japan Combustion Engine Manufacturing Company, Ltd. (Nippon Menkaki Seizo, K.K.) 16.7
Japan-Manchuria Graphite Company, Ltd. (Nichiman Kokuen K. K.) 91.1
Japan Oil Liquefaction Company, Ltd. (Nippon Yuka Kogyo, K.K.) 20.
Karafuto Coal Industry Company, Ltd. (Karafuto Tangyo, K.K.) 21.9
Korea Electric Industry Company, Ltd. (Chosen Denko, K.K.) 50.
North-Japan Industry Company, Ltd. (Kitanihon Kogyo K.K.) 33.
Oriental Sharpening Grindstone Industry Company, Ltd. (Toyo Kensaku Toishi Kogyo K. K.) 50.
Shoei Industry Company, Ltd. (Shoei Kogyo, K.K.) 100.
Showa Carbonic Acid Company, Ltd. (Showa Tansan, K.K.) 50.
Showa Synthetic Chemical Industry Company, Ltd. (Showa Gosei Kagaku Kogyo K.K.) 26.7
Tohoku Shinko Aluminum Company, Ltd. (Tohoku Shinko Aluminum, K.K.) 50.
* Now on Schedule of Restricted Concerns under Kawasaki Heavy Industries.
** Now on Schedule of Restricted Concerns under Yasuda Hozensha.
c. Profits - For the period 1 April 1944 to 31 March 1945, the Company had a net profit of \12,306,000.
d. Interlocking Directorates - In some cases the officers of Showa Electric Industry Company, Ltd., are officers of the concerns it controls through its investments.
3. The interests of USAFIK have been considered. This action does not affect the Korean Area.
4. This is considered an administrative matter.
5. Concurrences: Industrial Division, ESS (Mr. G. T. Walker): Natural Resources Section, Agricultural Division(Capt. C. W. Swanson); Legal Division, ESS (Lt. Col. E. R. Minnich).
/s/t/ J. McI. H.