'Sokaiya' ring busted for extorting millions from top companies
The China Post news staff
July 29, 2008, 12:00 am TWN
TAIPEI, Taiwan -- The National Police Agency's Criminal Investigation Bureau (CIB) recently apprehended some key members of Taiwan's largest "sokaiya" ring, the United Evening News reported yesterday.
The crooks successfully extorted millions from top Taiwanese companies in recent years, the newspaper said, without further information.
Sokaiya — also called corporate racketeers — are organized criminals who manage to extort huge sums of money from large public firms listed on the local stock exchange.
The blackmailers are not unique to Japan, where they often associate with the yakuza or local mafia. Since the 1990s, Taiwan's sokaiya have also threatened to publicly humiliate companies and their management during their annual meetings.
Basically, sokaiya operate by representing large shareholders or by purchasing enough shares of a company's stock to entitle them to attend the annual corporate shareholders' meeting.
Then, they usually contact a spokesperson of the corporation who is responsible for arranging the discussions during the shareholders' meeting, threatening to disrupt and prolong the meeting with various allegations of illegal or unethical corporate behavior. They further ask the company's management to publish justificatory statements in various newspapers at great expenses.
Faced with such threats, the official allegedly makes large payments to the gangsters, hoping to ensure that the annual meeting will go quickly and smoothly.
The worrisome sokaiya phenomenon pushed 637 publicly listed Taiwanese companies to hold their annual meeting on the same date last June to take no risks, the newspaper said.
Also, the newspaper pointed that the recently busted racketeers were not the only ones to operate a sokaiya ring.
According to the report, CIB officers have their eyes on two other crooks, surnamed Huang and Liang, who allegedly passed themselves off as finance or economic government officials so as to contact with companies' spokespersons for advertisement fees amounting to up to NT$2 million.