Tsutsumi entered his plea at the opening of his trial.

The high-profile trial in Tokyo District Court underlines not only the sometimes-shady dealings that fueled Japan's rags-to-riches growth after World War II — but also the country's recent push toward greater corporate accountability.

Tsutsumi, 71, entered the courthouse somberly, wearing a dark business suit. A court official confirmed that the session ended after about two hours and that Tsutsumi pleaded guilty to the charges.

Tsutsumi apologized for what he had done and acknowledged he had hurt shareholders, the quasi-public NHK TV reported.

At the opening of the trial, prosecutors said Tsutsumi conspired with several executives to falsify Seibu Railway's 2003 financial statement, putting the stake of Kokudo Corp., his privately owned company, in the railway far lower than actual numbers, according to the prosecutors' office.

Having a handful of top executives owning too much was a violation of Tokyo Stock Exchange rules. Seibu has acknowledged the deception, and the stock exchange delisted the company in December.

Prosecutors said Tsutsumi feared the consequences of getting delisted and wanted to sell the Seibu stocks last year but didn't want to take losses because their price was low.

Tsutsumi resigned as chairman last year to take responsibility for a separate racketeer scandal involving other executives.

Tsutsumi could face up to five years in prison and a fine of up to $46,000 for falsifying financial statements, or up to three years in prison and a fine of up to $27,000 for insider trading.

Consumer rights expert Kazuko Miyamoto said Japanese authorities shied from tackling such cases previously because they were more intent on helping businesses sustain growth than keeping corporate crimes in check.

"People always suspected (Tsutsumi) was getting rich through land deals without taking on his share of burden of social responsibility," said Miya-

moto, a professor at Kawamura Gakuen Women's University. "And so most of us weren't that surprised to see he was arrested. If anything, we were more surprised the authorities were finally cracking down."

Japan's corporate and financial regulators, long considered weak, have been strengthened by a push for new enforcement measures and increased scrutiny from foreign investors.

A government-backed amendment to securities laws that will require more disclosure from companies is being debated in Parliament. And more whistle-blowers have emerged as workers overcome unwillingness to speak up when they see wrongdoing.

Increased foreign ownership in Japanese stocks — up to about 22 percent from 8 percent a decade ago — and emboldened domestic funds have demanded Japanese companies become more transparent.

Major corporations have even been willing to bring foreigners into their senior ranks — a big break with the past. Sony Corp. has appointed Welshman Howard Stringer to be the first foreigner to head a major Japanese electronics maker.

Tsutsumi's case is only one in a string of scandals triggered by the changing climate.

Just this week, two former employees of Mitsui & Co., one of Japan's prized conglomerates, and an executive at an affiliate were arrested on fraud charges.