Mr. Yoshiaki Murakami, who has drawn intense public attention as Japan's most controversial investment fund manager, was arrested Monday by the Tokyo Public Prosecutor's Office on suspicion of violating the Securities and Exchange Law. He is suspected of having engaged in insider stock trading when his firm purchased Nippon Broadcasting System Inc. shares between late 2004 and early 2005. Mr. Murakami, a former official of the former Ministry of International Trade and Industry, set up an investment fund in 1999. It made headlines by making big profits through acquiring and selling a large stake in one company after another, including an apparel firm, an electronic parts maker and a food company. In the latest instance, it purchased a 47 percent stake in Osaka-based Hanshin Electric Railway Co.

Mr. Murakami, known as an advocate of shareholders' rights, has long attacked Japanese corporate culture, calling on companies to carry out management reform and pay more dividends. His arrest, however, has deepened public suspicion over the operations of his investment fund, which started with some 4 billion yen and now manages around 400 billion yen.

At a news conference he hastily called on the day of his arrest, Mr. Murakami said, "I see myself as a professional among professionals (in the fund management business). But I realize I committed a crime." He also said that when his fund acquired shares in NBS, he had no intention of making money through insider trading and that he will retire from the investment fund business and sell all his firms, including their shares, to younger operators of his fund. If he is found guilty of the unethical act he is accused of committing, his credit as an investor who stressed the importance of corporate governance will be forever tarnished. It is hoped that investigators will unravel hidden dimensions of the Murakami fund's operations.