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Book on Nomura Lands U.S. Author in British Court


LONDON — Soon after Al Alletzhauser arrived in Tokyo to work as an executive for the securities house James Capel & Co., he began looking for books about the Japanese and their ways.

But what he found was disappointing. "I realized everything was about 'Japan Inc.,' " said the 30-year-old American. "Everything was about robots--how mechanical everything seemed to be." That realization four years ago gave him the notion that there was a book to be done about the human side of Japanese business, about the billionaires whose names--let alone life stories--are little known in the West.

After three years of research and writing, Alletzhauser produced "The House of Nomura--The Rise to Supremacy of the World's Most Powerful Company: The Inside Story of the Legendary Japanese Dynasty."

The reward: a best seller. The penalty: a libel suit.

"House of Nomura" found immediate success in the United Kingdom when it was published there in January. (It goes on sale in the United States today.) But the Nomura securities firm has hit Alletzhauser and his publisher, Bloomsbury Publishing Ltd., with the libel action.

The powerful Japanese giant claims that the author defamed the company by falsely stating that its executives engaged in insider trading, offered confidential information to politicians in exchange for favors and "succumbed to the demands of gangsters." Alletzhauser, contending that the story is thoroughly documented, said he was shocked that Nomura took legal action: "I have all these tape recordings of all my meetings; I have all my notes; I have witnesses."

What makes the whole case particularly surprising is that Alletzhauser was permitted to interview members of the Nomura family and was given access to the family papers. He also interviewed 125 company executives. It is a far cry from an unauthorized biography of a dynasty.

Alletzhauser said the business practices he describes, and which Nomura has denied, are not uncommon in the Japanese business community. It's just that they are not written about.

"It's a powder keg," the author said. "Because if I win this case, it's going to change the way Japanese business is done forever. It's going to put a lot of pressure to bear on Japan to straighten up its act."

Alletzhauser said he wrote the book to get the West to change, not Japan. For instance, he believes that American banks should follow the example of Japan's banks and "take stakes in companies to whom they lend money."

From an ancient, but modest, building on a quiet side street near London's financial center, The City, Alletzhauser is plotting legal maneuvers while running two companies.

One of his companies, Emerging Markets Co., is channeling Western capital into India's stock market and other emerging markets. He also is a principal in Tiedemann International Research Ltd., which brokers financial research.

He has chosen to live in London, he said, because "it's easy access to all time zones and a short hop to Europe. And it's good fun."

Before his stints in Tokyo and London, Alletzhauser worked in New York and in Hong Kong. He grew up in a middle-class family in Madison, Conn., and attended Colgate University in Hamilton, N.Y., where he graduated in 1982 with a degree in English literature.

After briefly considering a career in law, he went to work at the renowned law firm Skadden, Arps, Slate, Meagher & Flom, where, he said: "I worked as a grunt for two years doing everything from Xeroxing documents to helping put together red herring prospectuses for takeovers. I worked on a lot of great oil and gas mergers. I learned more in those two years than I could ever have learned at business school."

At the same time, he had been submitting short stories to the New Yorker and Atlantic Monthly without success.

"I got slam-dunked," he said. "I don't know if that expression is still used in the States. I got piles of rejection slips."

Eager to do something different, he put $6,000 of savings into travelers checks and moved, on little more than a romantic whim, to Hong Kong. Although he went there to become a writer, he said, "I was only in Hong Kong a day when I decided I didn't want to be a starving artist."

He met a businessman named Arthur Lai who, Alletzhauser recalls, "looked me in the eye and said, 'Can you run a brokerage firm?' and without blinking I said yes." He snaps his fingers for emphasis.

"So he gave me this entire brokerage firm to run," Alletzhauser said. "It had no research department, no sales department, no trading department. I was the only salesman."

But Alletzhauser called friends in the United States who joined him at the firm, Chin Tung, and it was able to build up a substantial market share in the Hong Kong stock market in two years, he said.

When Alletzhauser asked Lai for 20% of the company, "he politely told me to wait a year and I politely told him I was going to work for James Capel in Tokyo," he said.

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