Tax-exempted by Japan, U.S. 'vulture' fund gains 1 trillion yen in windfall profits

Shinsei Bank, which was taken only by a U.S. investment firm after its predecessor went bankrupt and became nationalized, got listed on the Tokyo Stock Exchange on February 19, with its shares quoted high.

U.S. Ripplewood, which virtually controls the bank with a 99 percent stake in it, will gain about 1 trillion yen in windfall profits. The U.S. investment fund, which bought Shinsei Bank at 1 billion yen, will make profits amounting to 8 times the amount it has invested, taking into consideration its payments for more stock.

Akahata of February 20 criticized the Koizumi Cabinet for giving up its right of taxation on a foreign firm by exempting the U.S. investment fund from taxation and treating Shinsei Bank as an exception from the revised Japan-U.S. Tax Treaty.

If duly taxed, Ripplewood would be paying 20 billion yen in tax. To escape taxation, Ripplewood set up a token Netherlands-based firm.

On the other hand, the Japanese government had already used 8 trillion yen from public funds to resuscitate the bank, with more than 4 million of which is defined as a loss to be shouldered by the people.

On this state of affairs in which foreign vulture funds gain enormous profits while tax money is lost, the Japanese Communist Party in parliament demanded that the government levy a tax on profits made from tax money and use that tax for the benefit of the Japanese economy. (end)