みずほ改善計画 信頼回復への道筋が見えない

2013-10-31 04:26:55 | 英字新聞

The Yomiuri Shimbun October 30, 2013
Mizuho has a tough row to hoe before it can regain public trust
みずほ改善計画 信頼回復への道筋が見えない(10月29日付・読売社説)

Mizuho Bank appears to have hastily tried to end its lending scandal with lenient punishments. Given such lax punitive steps, the megabank faces a rocky path ahead to regain public trust that was lost by extending loans to gangsters.

Mizuho should show strong determination to make a fresh start, even considering an overhaul of its management system.

In connection with Mizuho’s loans to mobsters via its affiliated credit company, Orient Corp., among other entities, the bank has submitted to the Financial Services Agency a business improvement plan incorporating internal punishments and measures to prevent a recurrence of problematic lending.

Fifty-four current and former executives are subject to punishment. The penalties included dismissal of two executives in charge of compliance and pay cuts for 40 other executives. Yasuhiro Sato will remain president but have six months of his salary docked. Takashi Tsukamoto will step down as chairman of Mizuho Bank but remain as chairman of the bank’s parent, Mizuho Financial Group.

Former bank President Satoru Nishibori and 11 other former executives will be asked to return executive compensation.

The announced punishments are far from adequate as the current management will remain in place. Sato said at a news conference: “It’s extremely regrettable. We’ll deeply reflect on it.” But we cannot help but wonder whether he seriously considers his responsibility over such irregularities.

A third-party committee established to investigate the Mizuho scandal criticized the bank by saying in a report, “The bank lacked awareness as an organization of the importance of tackling the task of cutting off relations with antisocial groups.”

The committee has also pointed out that the contracts on which loans were extended to mobsters failed to include a clause that excluded loans to organized crime syndicates. The bank’s response to the scandal was far too lenient.

The committee, consisting of three lawyers, investigated the case for only about 20 days. Some people are doubtful whether the panel spent sufficient time trying to learn the truth.

Correct corporate culture

It was natural that Mizuho’s business improvement plan included establishment of a special section on the elimination of organized crime groups and introduction of board directors from outside. Efforts must be made thoroughly to prevent a recurrence of similar scandals.

Most imperative of all is to fundamentally rectify the bank’s corporate culture that has led to repeated irregularities since it was established in 2002 through the merger of Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan.

The turf-consciousness displayed by executives for the banks they hailed from led to a serious lack of corporate governance. This could be a factor behind the bank’s failure to deal with the loan scandal swiftly.

There are views within Mizuho calling for the current top management to be maintained to avoid a confrontation by elements in the three former banks over the selection of their successors. Such an inward-looking attitude will not lead to establishing “one Mizuho.”

In its on-site investigation of the bank, the FSA accepted at face value the bank’s explanation, that “the top management did not know about [the loans to mobsters],” thereby overlooking what actually happened. Was there any malicious attempt to prevent an additional probe? The FSA should investigate the scandal again and much more strictly.

If Mizuho’s business improvement plan is found to be flawed, the financial watchdog should consider additional administrative punishments.

(From The Yomiuri Shimbun, Oct. 29, 2013)
(2013年10月29日02時05分  読売新聞)


第3セクター債 バブルの清算を加速させたい

2013-10-30 04:19:15 | 英字新聞

The Yomiuri Shimbun October 29, 2013
Joint public-private firms must expedite efforts to end indebtedness
第3セクター債 バブルの清算を加速させたい(10月28日付・読売社説)

Joint public-private companies, generally known as third-sector corporations, may not be able to avoid liquidation as long as liabilities exceed assets.

Local governments operating loss-making firms in partnership with private-sector entities must waste no time in addressing the task of liquidating them—ending a negative legacy dating back to the days of the bubble economy—even if doing so will cause fiscal pain.

Bond issuance to expedite the consolidation or abolition of poorly performing third-sector corporations and businesses run solely by local governments has risen sharply recently.

Local governments issued third-sector bonds in 64 cases, with a combined value of ¥374.3 billion, during the April-September period this year.

In the three-year period from fiscal 2009 to fiscal 2012, bonds were issued 104 times with a combined value of ¥471.4 billion, indicating how massive the issuance of bonds issued was in the first half of this fiscal year.

With the issuance of third-sector bonds permitted specially for a period of five years from fiscal 2009, many local governments appear intent on issuing bonds just before the expiration of the deadline at the end of fiscal 2013.

Third-sector bonds are issued by local governments on the basis of resolutions by local assemblies, along with approval by either the internal affairs and communications minister or heads of relevant prefectural governments.

Issuance of these bonds enables local entities to reschedule their debts in the form of bonds, which have interest rates lower that those on other forms of debt. In addition, the central government offers preferential treatment by covering half of the interest cost by means of local tax grants, or tax allocations to local governments.

It is an extremely serious situation that the number of juridical persons, such as companies, that are considered on the brink of bankruptcy stands at 639 out of 1,928 juridical persons comprising third-sector corporations and enterprises operated solely by municipalities.

Don’t put off problems

About 60 percent of bond issues were by land development public corporations for the acquisition of plots of land prior to public works projects. Many local government-run corporations in such fields as forestry, housing and tourism are also heavily in debt.

Some third-sector corporations have racked up debts surpassing their net worth after huge tracts of land they purchased during the bubble economy were left unused because planned public works projects were scaled down after the bubble burst and land prices declined.

The vast amount of debt incurred by third-sector corporations adversely affects the fiscal health of local governments.

Third-sector business operations were the major factor behind the fiscal problems of the Yubari municipal government in Hokkaido. Because of its fiscal woes, the municipal government was designated as a body legally requiring fiscal reconstruction.

Especially problematic is the fact that a little less than 40 percent of the 1,928 quasi-public corporations, or 716, have yet to thrash out reform programs.

Liquidation of third-sector corporations makes it inevitable for local governments to take over the debts of the corporations. Fearing criticism for shouldering the debts, many local government heads tend to put off resolving the problem while they are in office.

Postponing the problems, however, will certainly result in increasing burdens on the local governments and residents due to increasing interest payments and drops in land prices.

Every local entity with third-sector debt problems must take up the challenge of drastically reforming the corporations by making use of the specially authorized bond issuance by the deadline at the end of March. This is prerequisite to ensuring an environment conducive to reinvigorating local economies.

Obviously, liquidation must be avoided as much as possible for third-sector corporations in charge of operations directly linked with residents’ lives such as hospitals and transportation.

Any further delay in heightening their business efficiency, however, will raise their indebtedness to be eventually passed on to residents.

Local governments should consult with all parties concerned about what should be done. They should provide straightforward explanations to assemblies and residents, instead of covering up the debts of their third-sector bodies.

The Internal Affairs and Communications Ministry will, in principle, refuse local governments’ requests to extend the bond issuance deadline for third-sector corporations. However, it may conditionally allow a bond issuance if the corporations and local governments concerned are considered to be making serious rehabilitation efforts. This stance is reasonable.

(From The Yomiuri Shimbun, Oct. 28, 2013)
(2013年10月28日01時21分  読売新聞)


活字文化の日 図書館を魅力ある知の広場に

2013-10-29 04:55:10 | 英字新聞


The Yomiuri Shimbun October 28, 2013
Print Culture Day a good opportunity to bury your nose in a library book
活字文化の日 図書館を魅力ある知の広場に(10月27日付・読売社説)

Today is Characters and Print Culture Day, marking the start of this year’s Book Week.

It may be a good idea to spend time reading in a library during your day off this autumn.

For people who do not read often, libraries may not figure much in their day-to-day lives.

Sixty-five percent of respondents to a recent Yomiuri Shimbun poll have not visited a library in the past year. Among major reasons cited for not using libraries were “having no time available to visit a library” and “do not enjoy reading.”

An increasing number of libraries, however, are using their ingenuity to try to attract more visitors.

The library run by the Tokorozawa municipal government in Saitama Prefecture, for instance, has introduced a system allowing people to check out or return the library’s books around the clock at any of the city’s eight convenience stores affiliated with the library.

This is an extremely useful service for people too busy at work to visit a library during regular library hours.

The Takeo Municipal Library of the Takeo city government in Saga Prefecture has been drawing three times as many daily visitors than before completing renovation work in April. The library is visited by many people from other prefectures.

The library modeled its interior after a large bookstore in Tokyo that features a space where customers can bury their noses in books. The library’s management has been consigned to a major rental company, which runs the library services year-round. The company allows visitors to check out CDs and DVDs for a fee and provides a corner for selling new publications.

The Takeo Municipal Library has been criticized for becoming too commercialized, but it can safely be said that it provides a good example of a library using its initiative to become more attractive.

‘Bibliobattle’ events

As stipulated by the Library Law, it should not be overlooked that the steady collection and storage of books and documents are a fundamental obligation of libraries.

The library operated by the Akita prefectural government, for that matter, has created electronic versions of about 2,000 items, including books in the public domain and materials on local history, for their conservation. They can be downloaded and read using browsing software on smartphones and other media.

Only about 20 libraries in this country employ in-house browsing or renting services of electronic books, but such services will no doubt increase in the future.

In addition, libraries provide a space to enable people to get together and exchange ideas. They also serve as venues for such events as lectures and art exhibitions.

Attracting great interest at present is a library-sponsored event referred to as a “bibliobattle.” Participants in the event introduce their favorite books and exchange opinions about them. In the end, the participants vote on what book they feel they would enjoy reading most. The event can give participants an unexpected opportunity to come across a great book that they would otherwise have missed.

The theme for this year’s Book Week is “Make a journey with books and journey the world of books.” Paying a visit to a library in your neighborhood can be regarded as a small journey.
 今年の読書週間の標語は、「本と旅する 本を旅する」だ。自宅近くの図書館を訪れるのも、小さな旅だろう。

A library housing a great diversity of books is a “plaza of knowledge,” where you may encounter a book beyond your expectations.

(From The Yomiuri Shimbun, Oct. 27, 2013)
(2013年10月27日01時19分  読売新聞)


メニュー偽装 「誤表示」の強弁は通らない

2013-10-28 04:26:06 | 英字新聞

The Yomiuri Shimbun October 27, 2013
Hankyu Hanshin Hotels paying high price for misleading menus
メニュー偽装 「誤表示」の強弁は通らない(10月26日付・読売社説)

A hotel operator’s obstinate insistence that “it wasn’t fabrication, but rather mislabeling” is unacceptable.

Food materials different from those described on menus were used in many dishes offered at restaurants of eight hotels operated by Hankyu Hanshin Hotels Co.

The false labeling went on for more than seven years, with dishes cooked with falsely advertised materials served to at least 79,000 customers.

The hotel operator made excuses during a news conference, saying “there was a lack of awareness of the need to check whether the items matched those displayed on the menus” and “our staff members were ignorant and insensible regarding [food materials].”

However, some employees said they knew the dishes offered did not use materials mentioned on the menus but that they “thought there was no problem.” It cannot be ruled out that the alleged fabrications were intentional.

Examples of false labeling include a case in which Shiba shrimp was written on menus, but Vannamei prawns were actually used. The former are priced at ¥2,500 per kilogram, while the latter costs far less, at ¥1,400 per kilogram.

Also, what was touted as Kujo-negi onions were found to be ordinary green and white leeks. The latter’s wholesale price is ¥800 per kilogram compared with ¥2,000 for leeks from Kujo, Kyoto Prefecture.

Lack of compliance

The hotel operator claimed “there was no intention whatsoever of gaining profits unfairly.” But this claim cannot be taken at face value. It is astonishing that a relatively famous hotel operator apparently did not comply with the law.

Hankyu Hanshin Hotels has reported the case to the Consumer Affairs Agency as a suspected violation of the Law against Unjustifiable Premiums and Misleading Representations. Masako Mori, state minister for consumer affairs and food safety, said her office would “deal with the case strictly.” A thorough probe is called for.

It came to light in June that roast beef originating in Chile had been misrepresented as “domestically produced beef” on the menus of restaurants at four Tokyo hotels operated by Prince Hotels, Inc.

In the wake of this revelation, Hanshin Hankyu Hotels investigated its hotels and discovered the menu scam.

The success of a hotel hinges on the quality of service offered. Customers pay money in exchange for enjoying delicious food made from high-quality materials.

Hankyu Hanshin Hotels has tarnished its own brand, which was built over many years, with its wrongdoing.

Fabrication scams involving food are not uncommon. It was revealed in 2007 that a high-end Japanese restaurant in Osaka falsified the origin of its beef. The restaurant was forced to close after it later came to light that the restaurant reused food materials.

The hotel chain operator intends to reimburse customers for the dishes made from falsely advertised materials. The refunds are said to total about ¥110 million.

The price paid for misrepresentation is high, and regaining public trust is no easy task. Hankyu Hanshin Hotels’ scam cannot be shrugged off by those in the food industry as someone else’s problem.

(From The Yomiuri Shimbun, Oct. 26, 2013)
(2013年10月26日01時32分  読売新聞)


ネット配信 外国企業にも消費課税が要る

2013-10-27 05:38:21 | 英字新聞


The Yomiuri Shimbun October 26, 2013
Impose consumption tax on digital products distributed from overseas
ネット配信 外国企業にも消費課税が要る(10月25日付・読売社説)

An unfair situation has emerged regarding how domestic and foreign firms are taxed in the rapidly growing industry of online digital data distribution. An environment must be created in which they can compete on an equal footing.

The Tax Commission has started examining the advisability of imposing the consumption tax even on e-books and music provided online from overseas.

Under the current system, the tax is imposed only on domestically provided electronic information.

For instance, no consumption tax applies to e-books bought by Japanese consumers on the Amazon.com online marketplace based in the United States.

If there are price differences for the same e-products due to tax, depending on whether they are provided from overseas or at home, domestic firms will be forced into a disadvantageous situation.

The publishing and Internet industries have pointed out that such an unfair tax burden impairs the competitive environment. They have every reason to call for reexamining the tax system based on such an argument.

Such circumstances have emerged because the imposition of consumption tax is limited to domestic transactions and imports of goods. The tax is not levied on data distributed through overseas servers because they are regarded as overseas transactions of non-goods.

The amount of tax revenues lost because of the no-tax rule for products provided online from overseas is said to be in the tens of billions of yen a year.

Adverse effects of levy

The government will raise the sales tax from 5 percent to 8 percent next April. The rate is scheduled to be increased to 10 percent in October 2015. If the range of the tax’s application is left unchanged, adverse effects of the tax exemption on online products provided from overseas are expected to expand.

Such unfair taxation may accelerate the hollowing-out of industry, as Japanese digital data providers may shift their bases overseas.

According to Impress Innovation Lab, Japan’s e-book market is expected to balloon to about ¥240 billion in fiscal 2017, about triple that of fiscal 2012.

Online information distribution is a promising growth industry. The government must accelerate work to reexamine the range of the consumption tax’s application.

However, a host of challenges need to be tackled, such as how to accurately grasp the online distribution prices of foreign companies.

Among other steps, it will be essential to establish a system in which Japanese tax authorities can cooperate with their foreign counterparts to share information on foreign companies.

Since about a decade ago, Germany and other European Union member countries successively introduced the so-called value-added tax, which is equivalent to Japan’s consumption tax, on online distribution services provided from outside the EU.

Online data distributors outside the EU are required to file a business registration, which has produced certain results. Such a registration system for Japan is also worth studying.

(From The Yomiuri Shimbun, Oct. 25, 2013)
(2013年10月25日01時41分  読売新聞)