Hearings Shed Little Light on Japanese Scandals : Finance: Some analysts believe that the uproar will blow over--and that there will be little brokerage-industry or bank reform.

TOKYO —  Two weeks of special parliamentary hearings into Japan’s financial scandals have ended with no major bombshells, just grumbling that nothing will change.

With the lack of any sizzling revelations, some analysts predict that the scandals will soon fade away.

“I really don’t think anything will come of it,” said Robert Zielinski, a securities analyst and author of a book about the Tokyo stock market. “They will take the files (of testimony), put them into a large crate . . . deposit it in a warehouse, and it will be forgotten.”

Testimony in front of two special committees was to have wrapped up Parliament’s investigation of brokerage firms’ $1.3-billion in compensation to favored clients for market losses and of banks’ issuance of allegedly fraudulent deposit certificates and questionable loans.

The hearings also examined allegations of stock manipulation by Nomura Securities Co.--the world’s largest brokerage--to benefit an ex-mob kingpin.

Little was revealed by the industry executives and Finance Ministry officials testifying before lawmakers, who often shied away from asking probing questions and at times seemed interested primarily in their own speech-making before a national television audience.

Nihon Keizai Shimbun, the respected economic daily, said the investigation was inferior to the U.S. Congress’ probe of the savings and loan scandal because the Japanese Parliament was understaffed. In addition, lawmakers focused on asking questions about morality instead of seeking facts, the paper said.

The nationally circulated Mainichi newspaper was a bit more blunt, suggesting Friday that major contributions to the governing Liberal Democratic Party by securities firms and banks affected the investigation.

The biggest recipient of donations last year was Ryutaro Hashimoto, who heads the Finance Ministry, which oversees brokerages and banks and is investigating the scandal.

“Criticism has been raised about the laxness of the investigation,” the Mainichi said. “People may now question that considerations for these ‘sponsors’ may be an underlying factor.”

Nihon Keizai Shimbun maintained that lawmakers were lax in scrutinizing Finance Ministry oversight of the industry and the relationship between top brokerages and an ex-mob leader involved in massive stock trading.

Investigations into the alleged dealings with the gangster, Susumu Ishii, suffered a setback when he died last week after a lengthy illness.

Among tidbits of information to come out in the hearings, Japan’s largest brokerages said they made more paybacks than the ones already acknowledged but did not say how much more or who got it.

There also was testimony indicating that many clients were aware of the compensation and that some paybacks went to investors who did not suffer market losses.

Japanese law forbids guaranteed profits and promises of compensation for market losses. The brokerages contend that they broke no law, but the paybacks have upset smaller investors who were not provided similar cushions.

Officials from the Finance Ministry were vague about their investigations and divulged few details of the reform package expected to be offered to Parliament in the next few weeks.

The ministry proposal is expected to be the next step in the effort to clean up the industry. The powerful ministry, however, opposes creating an independent watchdog agency that would dilute its power and threaten its close ties with the securities industry.

Newspapers have urged that more witnesses be called before the committees, and opposition parties are seeking additional hearings, but it is unclear if more will be held.

The lackluster hearings, which before they started were viewed as one of the biggest parliamentary events in years, failed to attract many television viewers, perhaps because the attitude of shoganai, which means nothing can be done, is widespread.