Japan Press Weekly

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2009 February 11 - 17 [POLITICS]

Suspicions deepen on sale of Kanpo no Yado inns

Akahata editorial

With suspicions deepening over Japan Post Holdings Co.’s sale of its Kanpo no Yado inns to Orix Real Estate Corp, the controversial deal has come under growing public scrutiny as Internal Affairs and Communication Minister Hatoyama Kunio demanded that the sale be reconsidered.

(The Kanpo no Yado inns started out as accommodations for postal life insurance policyholders. When Japan’s postal services were completely privatized, Japan Post Holdings Co. decided to sell its major Kanpo no Yado inns to Orix Real Estate Corp. at extraordinarily low prices. Preparations to sell assets held by the former Japan Post had begun in the course of privatizing the postal services. – JPS)

Not only their extraordinarily cheap price tags but also the decision to sell them to Orix Real Estate Corp. needs to be scrutinized. The decision to sell Kanpo no Yado inns to Orix should be nullified, and the selling-off of public assets at rock bottom prices must be investigated.

240-billion yen asset sold at 10-billion yen

The former public corporation Japan Post established Kanpo no Yado inns as accommodations for Kanpo life insurance policyholders. They were built by using collected Kanpo premiums.

Japan Post Holdings Co., the successor to Japan Post, decided to sell its 79 facilities, including 69 inns, to Orix for 10.9 billion yen.

The construction of these facilities is said to have cost about 240 billion yen, including 28 billion yen for Rafre Saitama, a huge accommodation complex. Clearly, it is unrealistic for these facilities to be sold at 10.9 billion yen. This should be unacceptable to Kanpo insurance policy holders.

Japan Post Holdings Co. has explained that Kanpo no Yado inns are in the red and cannot be sold at asset values. But these not-for-profit inns are different from other hotels for profit in that they offer Kanpo insurance policy holders accommodations and other services at reasonable rates.

It was revealed that a Kanpo no Yado inn had been sold for only 10,000 yen and resold six months later for 60 million yen.

It is essential to look into the details regarding the sale of Kanpo assets.

Japan Post Holdings Co. has varied its explanation as to how Orix Real Estate got the right to buy Kanpo no Yado inns. This is really incomprehensible.

According to Japan Post Holdings Co., it sought buyers only on its website. Initially, 27 companies responded to the invitation to bid. But the number went down to 22, to seven, to two. Finally, only Orix remained after another company, which had remained until a sudden change was made in contract terms, gave up on the competition. This cannot be considered competitive bidding.

Orix Corporation Chairman Miyauchi Yoshihiko took a lead position in promoting “structural reform” policies as a member of the government council of regulatory reform. He frequently spoke about privatizing the postal services, paving the way for the sale of Kanpo no Yado inns.

Miyauchi was known as “a businessman with political connections.” If he was to avoid raising suspicions, he ought to have avoided participating in the bid. Even without Hatoyama, the public can smell the deal as a fixed bid, which is absolutely unconscionable and illegal.

Reconsider the postal privatization itself

The present scandal involving the postal assets should be seen as a product of the privatization that abolished Japan Post (a public corporation), and creates privatized companies for mail delivery, postal savings, and Kanpo insurance. The privatization thus meant selling off of public assets at a loss.

Japan Post Holdings Co. says that continuing to run Kanpo no Yado inns will put the company in a financially difficult position. It was clear that the privatization and breakup of the postal services would mean putting its business in a financially unstable situation.

Mail delivery, postal savings, and the postal insurance should have remained public properties. It is unacceptable that those assets that were privatized despite strong public opposition are being sold off to a businessman involved with politics and with political connections.