The arrest is the latest move in a scandal that has touched Japan's most powerful investment houses and caused lasting damage to Tokyo's standing as a world financial centre.
Mr Miki resigned as president last month to take responsibility for the scandal, in which Yamaichi is accused of paying 79m (pounds 410,000) to so- called "sokaiya" gangster Ryuichi Koike. Mr Koike is already under arrest for his role in accepting illegal payments from securities houses in exchange for not disrupting their annual meetings or exposing dubious financial practices.
Separately yesterday, Daiwa Securities said its president, chairman and five other top executives would resign at the end of the month. The departures, which mean Daiwa joins a growing list of top companies embroiled in the scandal, followed a raid on the securities house's offices last week.
Payments to sokaiya have been illegal in Japan since 1983, but firms have found it impossible to break their ties with the underworld. In Japan, organised crime has close links with legitimate business, especially the construction and financial sectors, and ridding the system of corruption has become one of the government's greatest challenges.
The payments scandal has surfaced at a crucial time for Japan's financial industry just as it is preparing for a raft of financial reforms - dubbed, inevitably, Big Bang - designed to liberalise the country's formerly closed markets.
During the summer, Nomura and Dai-Ichi Kangyo, a bank, had parts of their operations shut down as punishment for payments to the same sokaiya extortionist. More than a dozen Nomura and DKB executives were indicted and a former chairman of the bank committed suicide rather than face interrogation. Both companies were banned from participating in government bond issues until next year.
Daiwa said yesterday its president and chairman had never met Mr Koike and were not involved in the scandal. They were resigning, however, to take responsibility for the damage done to the firm's credibility.
As an indication of the extent to which the resignations were simply a token gesture, Daiwa admitted that it would probably not publish an internal investigation into the payoff affair. The firm also said the executives would remain advisers to Daiwa.
The sokaiya scandal is only part of the problem afflicting Japan in the run-up to its Big Bang. Its banks and securities houses are also accused of encouraging the asset-price inflation of the late 1980s and mishandling its collapse in the early 1990s. That incompetence threatens to turn Tokyo into a financial backwater - already a third of the trading in Nikkei 225 futures is in Singapore and 15 per cent of Japanese shares are traded in London.
As an attempt to reverse Tokyo's decline, Prime Minister Ryutaro Hashimoto announced last November, a blueprint for deregulation of the tightly controlled financial markets. The barriers between banks, securities houses and other institutions will be removed, as will foreign exchange controls.
While some analysts believe Big Bang can solve some of Tokyo's problems, others think it could increase the level of corruption.Reuse content