[TODAY'S TOP STORIES] from [The Japan Times]
[BUSINESS NEWS]
Wednesday, Jan. 20, 2010
JAL files for bankruptcy in record failure
¥2 trillion in debt; carrier awaits reconstruction
By KAZUAKI NAGATA
Staff writer
Japan Airlines Corp. filed for bankruptcy Tuesday under the Corporate Rehabilitation Law in the biggest nonfinancial corporate failure in the postwar period.
The country's flagship carrier is expected to continue flying and honor tickets with government assurances for lifeline funds, while undergoing a three-year rehabilitation process that is expected to entail massive cuts in jobs and in unprofitable routes, both domestic and international.
The airline's debts are estimated at ¥2.3 trillion.
JAL President Haruka Nishimatsu resigned to take responsibility for the airline's failure.
"Today, the government, creditor banks, shareholders and Japanese people have given us a last chance (to reconstruct the company)," Nishimatsu said.
The government-backed Enterprise Turnaround Initiative Corp. of Japan will lead JAL's restructuring, and Kyocera Corp. founder Kazuo Inamori will be the carrier's new CEO.
ETIC officially declared it will resurrect JAL under court-supervised rehabilitation that will involve massive public funds.
"JAL plays a key role in our nation's aviation network, which is a development base of our nation, so needed supports will be provided until it will be reconstructed," transport minister Seiji Maehara said.
Prime Minister Yukio Hatoyama also pledged the government's help.
"What's most important is that all people who are working (for the airline) devote all their energies toward its restructuring," Hatoyama said after the company filed for bankruptcy protection with the Tokyo District Court. "On that premise, the government will support their efforts" so that people can fly on a JAL plane whenever they wish to do so, he said.
JAL held a special board meeting in the afternoon and later filed for protection from creditors along with two key subsidiaries — Japan Airlines International Co. and JAL Capital Co.
The court appointed lawyer Eiji Katayama and ETIC as trustees who will be responsible for drafting and carrying out the reconstruction plan. All top JAL executives will be stepping down, and the new management team is expected to be organized in the beginning of February.
ETIC is planing to cut 15,661 jobs, or about 30 percent of JAL's workforce, by the business year ending in March 2013, and terminating 31 routes. It also plans to sell about half of the airline's affiliate companies, especially those engaged in the hotel and travel businesses, and concentrate on its core airline business.
Meanwhile, the Tokyo Stock Exchange announced that JAL shares will be delisted Feb. 20. JAL's share price dropped to ¥3 at one point during Tuesday trading before closing at ¥5.
Information from Kyodo added
[NATIONAL NEWS]
Wednesday, Jan. 20, 2010
Ozawa ready for once-over by prosecutors
Negotiations under way for date of questioning
Kyodo News
Democratic Party of Japan Secretary General Ichiro Ozawa and prosecutors have begun arranging a date for him to undergo voluntary questioning over allegations that his fund management body failed to report money used to buy land in Tokyo in 2004, sources close to the case said Tuesday.
In a related development, the prosecutors have apparently confirmed that about ¥300 million was withdrawn about 10 years ago from Ozawa's account at a trust bank to which Ozawa says he had entrusted the money used for the land purchase, the sources said.
The prosecutors are expected to ask Ozawa to elaborate on such points as where he kept the ¥300 million until 2004, where he got the remaining ¥50 million or so needed to buy the land and how he can explain the differences in accounts with his former secretary, who was arrested last week.
While the prosecutors suspect the money used for the land deal included illegal donations, Ozawa said at the DPJ's annual convention Saturday he used funds he had personally accumulated and that he had told investigators the name of the trust bank's branch to which he had entrusted the money.
Ozawa's fund management body, called Rikuzankai, purchased land in Setagaya Ward, Tokyo, for about ¥352 million on Oct. 29, 2004. The money was not properly registered in the body's 2004 fund report.
DPJ lawmaker Tomohiro Ishikawa, who was arrested Friday as one of Ozawa's private secretaries at the time in charge of the land purchase, has told the prosecutors the money used to buy the land came from \400 million borrowed from Ozawa, according to investigative sources.
Ishikawa's lawyer also said the resources for the land deal, stemming from funds Ozawa inherited from his father, had been in a trust bank and withdrawn about 10 years ago.
As part of efforts to clarify the flow of funds in the land deal, the prosecutors on Tuesday searched medium-size construction companies involved in subcontracts for a project to build a dam in the city of Oshu, Ozawa's district in Iwate Prefecture, investigative sources said.
The contractors include Yamazaki Construction Co. in Tokyo and Miyamotogumi Co. in Himeji, Hyogo Prefecture.
[NATIONAL NEWS]
Wednesday, Jan. 20, 2010
Hatoyama praises security pact deterrence on 50th anniversary
By MASAMI ITO
Staff writer
Commemorating the 50th anniversary of the revised Japanese-U.S. security treaty, Prime Minister Yukio Hatoyama on Tuesday praised the pact for maintaining Asia-Pacific peace and stressed that U.S. forces here have been and will continue to be a deterrent amid uncertain times.
The past 50 years have witnessed significant changes, but the world continues to face danger, Hatoyama said, citing the rise of terrorism after the 9/11 attacks and Pyongyang's nuclear and missile threats.
"It can be said that the Japan-U.S. security pact will continue to be indispensable not only for our nation's defense but also for the peace and prosperity of the Asia-Pacific region," he said in a prepared statement.
"Under the security environment, which continues to have unstable and uncertain factors, I think that the presence of the U.S. military based on the Japan-U.S. security treaty will continue to serve (the public good) by giving a great sense of security to the countries in the region."
Hatoyama said Japan will work with the U.S. to deepen the bilateral alliance and present the results of the discussion to the public before the end of the year.
The original security pact was signed by Tokyo and Washington in 1951 but was revised in 1960 to correct an imbalance and erase a clause permitting the U.S. to intervene against "large-scale internal riots and disturbances in Japan."
The current treaty also clarifies the U.S. role in defending Japan if it is under attack and enables the U.S. forces to use "facilities and areas in Japan."
Later in the day, Foreign Minister Katsuya Okada, Defense Minister Toshimi Kitazawa, Secretary of State Hillary Rodham Clinton and Defense Secretary Robert Gates issued a joint statement vowing to lessen the military burden on Okinawa but not the deterrence capacity of the U.S. forces.
The ministers "endorse ongoing efforts to maintain our deterrent capabilities in a changing strategic landscape, including appropriate stationing of U.S. forces, while reducing the impact of bases on local communities, including Okinawa, thereby strengthening security and ensuring the alliance remains the anchor of regional stability," the statement said.
Okinawa is home to 75 percent of all U.S. forces in Japan and people there have repeatedly urged the central government to reduce the burden.
[BUSINESS NEWS]
Wednesday, Jan. 20, 2010
JAL files for bankruptcy in record failure
¥2 trillion in debt; carrier awaits reconstruction
By KAZUAKI NAGATA
Staff writer
Japan Airlines Corp. filed for bankruptcy Tuesday under the Corporate Rehabilitation Law in the biggest nonfinancial corporate failure in the postwar period.
The country's flagship carrier is expected to continue flying and honor tickets with government assurances for lifeline funds, while undergoing a three-year rehabilitation process that is expected to entail massive cuts in jobs and in unprofitable routes, both domestic and international.
The airline's debts are estimated at ¥2.3 trillion.
JAL President Haruka Nishimatsu resigned to take responsibility for the airline's failure.
"Today, the government, creditor banks, shareholders and Japanese people have given us a last chance (to reconstruct the company)," Nishimatsu said.
The government-backed Enterprise Turnaround Initiative Corp. of Japan will lead JAL's restructuring, and Kyocera Corp. founder Kazuo Inamori will be the carrier's new CEO.
ETIC officially declared it will resurrect JAL under court-supervised rehabilitation that will involve massive public funds.
"JAL plays a key role in our nation's aviation network, which is a development base of our nation, so needed supports will be provided until it will be reconstructed," transport minister Seiji Maehara said.
Prime Minister Yukio Hatoyama also pledged the government's help.
"What's most important is that all people who are working (for the airline) devote all their energies toward its restructuring," Hatoyama said after the company filed for bankruptcy protection with the Tokyo District Court. "On that premise, the government will support their efforts" so that people can fly on a JAL plane whenever they wish to do so, he said.
JAL held a special board meeting in the afternoon and later filed for protection from creditors along with two key subsidiaries — Japan Airlines International Co. and JAL Capital Co.
The court appointed lawyer Eiji Katayama and ETIC as trustees who will be responsible for drafting and carrying out the reconstruction plan. All top JAL executives will be stepping down, and the new management team is expected to be organized in the beginning of February.
ETIC is planing to cut 15,661 jobs, or about 30 percent of JAL's workforce, by the business year ending in March 2013, and terminating 31 routes. It also plans to sell about half of the airline's affiliate companies, especially those engaged in the hotel and travel businesses, and concentrate on its core airline business.
Meanwhile, the Tokyo Stock Exchange announced that JAL shares will be delisted Feb. 20. JAL's share price dropped to ¥3 at one point during Tuesday trading before closing at ¥5.
Information from Kyodo added
[NATIONAL NEWS]
Wednesday, Jan. 20, 2010
Ozawa ready for once-over by prosecutors
Negotiations under way for date of questioning
Kyodo News
Democratic Party of Japan Secretary General Ichiro Ozawa and prosecutors have begun arranging a date for him to undergo voluntary questioning over allegations that his fund management body failed to report money used to buy land in Tokyo in 2004, sources close to the case said Tuesday.
In a related development, the prosecutors have apparently confirmed that about ¥300 million was withdrawn about 10 years ago from Ozawa's account at a trust bank to which Ozawa says he had entrusted the money used for the land purchase, the sources said.
The prosecutors are expected to ask Ozawa to elaborate on such points as where he kept the ¥300 million until 2004, where he got the remaining ¥50 million or so needed to buy the land and how he can explain the differences in accounts with his former secretary, who was arrested last week.
While the prosecutors suspect the money used for the land deal included illegal donations, Ozawa said at the DPJ's annual convention Saturday he used funds he had personally accumulated and that he had told investigators the name of the trust bank's branch to which he had entrusted the money.
Ozawa's fund management body, called Rikuzankai, purchased land in Setagaya Ward, Tokyo, for about ¥352 million on Oct. 29, 2004. The money was not properly registered in the body's 2004 fund report.
DPJ lawmaker Tomohiro Ishikawa, who was arrested Friday as one of Ozawa's private secretaries at the time in charge of the land purchase, has told the prosecutors the money used to buy the land came from \400 million borrowed from Ozawa, according to investigative sources.
Ishikawa's lawyer also said the resources for the land deal, stemming from funds Ozawa inherited from his father, had been in a trust bank and withdrawn about 10 years ago.
As part of efforts to clarify the flow of funds in the land deal, the prosecutors on Tuesday searched medium-size construction companies involved in subcontracts for a project to build a dam in the city of Oshu, Ozawa's district in Iwate Prefecture, investigative sources said.
The contractors include Yamazaki Construction Co. in Tokyo and Miyamotogumi Co. in Himeji, Hyogo Prefecture.
[NATIONAL NEWS]
Wednesday, Jan. 20, 2010
Hatoyama praises security pact deterrence on 50th anniversary
By MASAMI ITO
Staff writer
Commemorating the 50th anniversary of the revised Japanese-U.S. security treaty, Prime Minister Yukio Hatoyama on Tuesday praised the pact for maintaining Asia-Pacific peace and stressed that U.S. forces here have been and will continue to be a deterrent amid uncertain times.
The past 50 years have witnessed significant changes, but the world continues to face danger, Hatoyama said, citing the rise of terrorism after the 9/11 attacks and Pyongyang's nuclear and missile threats.
"It can be said that the Japan-U.S. security pact will continue to be indispensable not only for our nation's defense but also for the peace and prosperity of the Asia-Pacific region," he said in a prepared statement.
"Under the security environment, which continues to have unstable and uncertain factors, I think that the presence of the U.S. military based on the Japan-U.S. security treaty will continue to serve (the public good) by giving a great sense of security to the countries in the region."
Hatoyama said Japan will work with the U.S. to deepen the bilateral alliance and present the results of the discussion to the public before the end of the year.
The original security pact was signed by Tokyo and Washington in 1951 but was revised in 1960 to correct an imbalance and erase a clause permitting the U.S. to intervene against "large-scale internal riots and disturbances in Japan."
The current treaty also clarifies the U.S. role in defending Japan if it is under attack and enables the U.S. forces to use "facilities and areas in Japan."
Later in the day, Foreign Minister Katsuya Okada, Defense Minister Toshimi Kitazawa, Secretary of State Hillary Rodham Clinton and Defense Secretary Robert Gates issued a joint statement vowing to lessen the military burden on Okinawa but not the deterrence capacity of the U.S. forces.
The ministers "endorse ongoing efforts to maintain our deterrent capabilities in a changing strategic landscape, including appropriate stationing of U.S. forces, while reducing the impact of bases on local communities, including Okinawa, thereby strengthening security and ensuring the alliance remains the anchor of regional stability," the statement said.
Okinawa is home to 75 percent of all U.S. forces in Japan and people there have repeatedly urged the central government to reduce the burden.