Rebirth in Japan: The Heiress Who Conquered the World

October 29, 1990. Tuesday. Osaka. Kitashinchi. 8:17 PM.

The noren curtain of the ryotei ”Takekaze” was lifted from the inside. The proprietress knelt on the wooden floor of the entryway, her forehead almost touching the back of her hand, seeing off the last guest whose leather shoes disappeared at the end of the corridor.

Then she straightened up and slid the lattice door at the end of the corridor shut.

Once the door was closed, no sound from inside could be heard from the outside.

This ryotei was built during the Taisho era. The walls were a double-layered mud wall structure with soundproofing cotton. It was said that a certain Funaba tycoon had used it to entertain military officials back in the day. Nearly seventy years had passed, and while the guests had changed, the soundproofing remained the same.

Second floor. Eight-tatami room.

Five people were kneeling inside the shoji doors.

Sitting in the seat of honor was an old man in his early seventies. His hair was completely white, combed without a single strand out of place. The skin on his cheeks was loose and sagging, but the eyes in his sockets were still sharp.

Urakami. Former secretary-general of Hakusuikai, and current ”advisor.”

The title of advisor in Japanese business organizations meant one of two things. Either they were truly retired and only left with a name, or they didn’t need a name and could make the sitting secretary-general change his mind with a single phone call.

Urakami belonged to the latter.

Sitting to his right was Yasui, executive director of the Sumitomo Bank Osaka branch. Fifty-seven years old, thin lips, jawline sharp as a blade.

He had worked in the loan approval department since he was thirty-two, twenty-five years total. Sixty percent of the real estate loan quotas for the entire Osaka branch had passed through his signature.

Beside Yasui was Deputy General Manager Ueba. The deputy manager who stood in the Itoman third-floor conference room yesterday reciting those four rules.

He had changed into a dark blue suit today, and his sitting posture was a bit more relaxed than yesterday. After all, this was his home turf.

On the left sat two people.

One was the chief of the Planning Office of Itoman, named Kawachi. Forty-eight years old, gray at the temples, fingernails neatly trimmed.

The ”Planning Office” he was in charge of was known within Itoman as the ”Second Finance Department,” meaning the official finance department managed the open accounts, while he managed the secret accounts.

The last one was a young man sitting near the sliding door. Thirty-two years old, thin-framed glasses, gray suit, with a Sumitomo Bank badge pinned to his chest. The business card read ”Sumitomo Bank Osaka Branch, Secretarial Office, Deputy Chief.”

He had a B5-sized notebook spread out in front of him, the cap of his fountain pen already unscrewed. Meeting minutes.

There was only sencha on the table, the color so pale it was almost transparent, poured into a Shino-ware cup, the surface shimmering with a faint green.

Urakami picked up the cup, took a sip, and set it down.

”Ueba, tell us about the situation at Itoman yesterday.”

Ueba leaned forward.

”Saionji sent four people. The team was led by their group’s executive director, Endo.”

”An audit director from SIS, a Section Chief from the Legal Department, plus two technical documentation staff.”

”And their equipment?” Yasui asked.

”Four hard-shell briefcases. I didn’t see any scanners or mobile devices.”

Yasui tapped his fingers on his knee. ”What did they look at?”

”In the morning, they only looked at the trade contract ledger. For the 1989 fiscal year.” Ueba’s voice was very flat. ”In the afternoon, they looked at the serial numbers for warehouse receipt financing.”

Urakami’s gaze did not fall on Ueba. He stared at the teacup on the table, as if looking at the tea stains at the bottom.

”What did you restrict them from?”

”Four rules. Internal bank documents are not open, client files are not to be copied, credit approval processes are not within the scope of verification, and reconciliations go through postal channels.”

”Did he accept it?”

Ueba paused for half a second.

”He didn’t refute it on the spot. He only said he respected the bank’s rules.”

Urakami’s eyebrows twitched.

”And then?”

”Then he took out a margin payment voucher.” Ueba’s voice dropped half an octave. ”It was what Itoman paid to the Osaka branch’s third escrow account, and he asked me where the corresponding copy of the letter of credit was.”

The room fell silent.

Outside the shoji paper, the faint sound of the proprietress cleaning dishes came from the end of the corridor. The clinking of bowls and dishes sounded like rain in a distant place.

Yasui turned to look at Kawachi.

Kawachi’s expression didn’t change much. He rubbed the joint of his right index finger with his thumb. There was a faint cigarette burn there, from when he accidentally burned himself while smoking.

”About the letter of credit,” Kawachi spoke up, his voice a bit hoarse. ”The five margin payments, the corresponding letters of credit were indeed opened.”

”Opened for whom?” Yasui asked.

”Hanwa Metal.”

Yasui’s jawline tightened.

”Did the goods arrive?”

”No.” Kawachi answered very directly. ”Those five were purely financing letters of credit. The money went into the escrow account, did a circle, and finally landed in the accounts of those two shell companies in Kitahama.”

After he finished this sentence, the air in the room solidified again. The young secretary’s pen tip stopped on the paper. Ink gathered into a tiny bead at the tip, hanging but not falling.

Urakami put down his teacup.

”Here is the problem.” His voice was not loud. ”Endo has already seen the gap in the numbering. He knows there are five margin payments without corresponding real trade.”

He raised his eyes.

”He doesn’t need the bank’s underlying documents now. Because Itoman’s own ledger has already pointed out the hole.”

Yasui pressed his lips into a line.

Ueba lowered his head.

Urakami looked around at the four people present. Then his gaze fell back to the table, stopping on that cup of transparent sencha.

”Gentlemen.”

His speaking speed slowed down.

”That eldest daughter of the Saionji Family is seventeen years old this year.”

Kawachi’s hand stopped. Ueba raised his head.

Yasui opened his mouth, seemingly wanting to chime in.

Urakami raised a hand, stopping him.

”I don’t want anyone to misunderstand what I mean by this.”

He withdrew his hand to his knee.

”Age is not the point.”

”Everyone knows whose tuition that eldest daughter has paid for these past few years.”

”The Ministry of Finance, the Ministry of Construction, those people on Wall Street, and Seibu’s Tsutsumi Yoshiaki. Which one of them has ever gotten the better of her?”

No one in the room answered.

Urakami continued.

”The real problem is Sumitomo Yoshio.”

He scratched a line on the gap in the tatami mat with his fingernail.

”The main family has already authorized it. A black-and-white power of attorney, with Yoshio’s personal seal on it. Saionji’s people are using this authorization to enter Itoman’s territory to look at the books.”

”The pretext is to assist the main family in organizing old accounts. In reality—”

He didn’t finish his sentence.

Yasui finished it for him.

”In reality, it is the main family bringing outsiders into the internal Sumitomo system.”

Urakami nodded slightly.

”This is what we are here to talk about tonight.”

He pushed the teacup aside.

”Whether it’s bank bad debts or the hole at Itoman, these are our own affairs. Handled within the association, closed doors to clean it up, and outsiders won’t be able to see it.”

”But this move by Yoshio—”

He raised his eyes, sweeping across Yasui and Ueba.

”It broke the rules.”

...

Silence for nearly ten seconds.

The young secretary’s pen fell, leaving a small ink dot on the paper. He quickly pressed his finger on the ink dot and turned the notebook to the next page.

Yasui was the first to speak.

”Mr. Urakami. The audit team’s current progress, if they only look at Itoman’s trade ledgers and warehouse receipts, the most they can deduce are the two layers of ’abnormal prepayments’ and ’empty warehouse serial numbers’.”

”To string the whole chain together, they must get the original letters of credit from the bank, the credit approval records, and the transaction details of the third escrow account.”

He tapped his index finger on his knee.

”These three things, if the bank doesn’t give them, they can’t cross the bridge.”

Ueba immediately followed up.

”But when Endo asked about the margin voucher yesterday, I could feel it. He won’t stop here.”

”He knows the bridge is over there. He just hasn’t crossed it yet.”

Urakami didn’t respond. He was waiting.

Yasui took a deep breath.

”Step one, I suggest continuing to use compliance regulations as a barrier to restrict the audit team’s cross-verification ability.”

He held out a hand and bent one finger.

”Specifically, have Itoman’s document provision follow a ’departmental hierarchical filing system’ starting tomorrow. Trade contracts go to the Trade Management Department, warehouse receipts to the Logistics Department, margins to the Finance Department, and invoices to the Tax Section.”

”Each item requires a separate application. The application form can only be submitted after approval by the department head.”

”Those with incorrect formats, wrong stamp positions, or overly vague application reasons will be returned for refilling.”

Urakami nodded slightly.

Yasui bent the second finger.

”The signatories who directly handled those abnormal transactions, subordinates of Mitamura, Matsuzaki of the Trade Section and Yoshida of the General Affairs Section.”

”Matsuzaki will take sick leave starting tomorrow. I will arrange the medical certificate, hospitalization for a gastric ulcer check-up, two weeks.”

”Yoshida will be transferred. The reason will be the rotation system.”

Kawachi added from the side.

”I will handle Matsuzaki. Just let him take his leave.”

Urakami did not object. His fingers tapped on his knee slowly, with a very even rhythm.

Yasui looked at Urakami’s expression and continued.

”Step two.”

His voice lowered.

”We need to spread word in the Kansai business world.”

Kawachi turned his head.

Yasui’s gaze fell on a non-existent point on the table.

”The Chamber of Commerce and Industry magazine has a special issue next month, the theme is ’Kansai Industrial Self-Rescue After the Bubble’.”

”I have someone in the editorial department. We can add a commentary.”

”What to write?” Urakami asked.

”Write ’Tokyo capital is taking advantage of the bubble burst to erode the foundation of Kansai industry’.”

Yasui’s tone was very flat.

”Saionji Trading was just upgraded last month. The first thing they did was set up a temporary office in Osaka. The second thing was to come and look at Itoman’s books. The third thing, their private banquet last week invited the presidents of Sumitomo Metal, Sumitomo Chemical, and Sumitomo Electric.”

”Put these three things together, and anyone can see it.”

Urakami’s eyebrows raised slightly.

”You want the manufacturing presidents to feel—”

”Feel that Saionji came to Osaka to steal business.” Yasui took over. ”Letters of credit, overseas procurement channels, trade settlement. These are the lifeblood of traditional trading companies. Once Saionji Trading digs in, local Kansai trading companies and banks will be squeezed out.”

”Those presidents, while afraid that bank bad debts will implicate them, are even more afraid of letting the wolf into the house.”

Urakami did not express his stance immediately. He picked up the teacup, found it was cold, and put it down again.

”The direction is right.” He said. ”But don’t write it too explicitly.”

”Just let people get the taste of it. Don’t use the words ’Saionji’.”

Yasui nodded. ”Use ’Tokyo Emerging Capital Group’.”

”Fine.”

Urakami’s fingers stopped. He turned to Kawachi.

”Step three.”

Kawachi sat up a bit straighter.

Urakami looked at him, eyes half-closed.

”Financing tools.”

Kawachi understood. He moved his hand from his knee to the table, spreading his fingers, as if measuring something.

”Sumitomo Chemical’s standby credit line was already frozen by Citibank last week. If the Osaka branch tightens it at the same time—”

”Don’t tighten it.” Urakami interrupted him.

Kawachi paused.

”Don’t let anyone say ’Hakusuikai is retaliating against the manufacturing presidents’.” Urakami’s voice was very soft. ”Once this impression is formed, they will run even faster.”

Yasui’s brows knitted. ”Then—”

”Technical review.” Urakami said the four words.

”Letter of credit margin ratio, recalculated according to the latest real estate valuation model.”

”Short-term financing renewal, add a ’related risk cross-verification’ link to the approval process.”

”Overseas standby credit line, require the latest appraisal report of the collateral.”

He pushed the teacup further away.

”We are compliant in every step, and every step has institutional basis.”

”It’s just that every step will delay the arrival of funds by three to five days.”