Japan's "richest man" takes another fall

[Mulboyne]

Kyodo: LDP leaders start to distance themselves from Tsutsumi
Property tycoon Yoshiaki Tsutsumi, who was arrested Thursday over fraud related to Seibu Railway Co shares, provided no particular benefits to the ruling party faction backing Prime Minister Junichiro Koizumi, Chief Cabinet Secretary Hiroyuki Hosoda said. Koizumi admitted Tsutsumi is a close acquaintance but declined to comment on his arrest. Tsutsumi is said to have close ties with the faction formerly led by Koizumi and now by former Prime Minister Yoshiro Mori. Hosoda said the faction "has not received particularly warm treatment" from Tsutsumi.

[Captain Japan]

Investigators enter the head office of Kokudo Corp. in Tokyo's Shibuya Ward on Thursday.
Tsutsumi arrested in Seibu scandals
Asahi

His dictatorial ways come back to haunt him, sources say.

Prosecutors skipped past the minions and went straight to the top, arresting former Kokudo Chairman Yoshiaki Tsutsumi on Thursday over scandals in the Seibu group that he ran with autocratic control.

It was Tsutsumi's reputed tyrannical way of running his companies that led prosecutors to believe he was the one who gave the orders to falsify a financial report on shareholdings in Seibu Railway Co., sources close to the investigation said.

Although former executives in the Seibu group have also been questioned in the case, prosecutors went after their boss because they were likely just obeying his instructions, the sources said.

Tsutsumi, 70, is suspected of falsifying financial statements and insider trading.

He has admitted a role in the alleged wrongdoings, but prosecutors also found some discrepancies in his statements after he agreed to answer questions, the sources said....the rest...

I wonder if the investigators called ahead to make sure he wasn't busy.

[GuyJean]

I wonder if the investigators called ahead to make sure he wasn't busy.

The call probably went something like this:

"Hi, Mr. Nantoka-sama? We're planning to come by around 10am tomorrow morning for a... 'raid'. Could you have all necessary documents packaged in brown boxes by then? Thank you.. Sorry.. Thanks.. Sorry to bother.. Thank you. Sorry.. Sorry.. Sorry"

From Roppongi Hills: PLAYPEN OF DEATH! thread..

GJ

[Captain Japan]

Ex-Seibu president who killed himself said Tsutsumi made him lie
Mainichi

Former Seibu Railway Co. President Terumasa Koyanagi who committed suicide late last month had earlier told investigators that the had no choice but to lie in the firm's stock ownership report because he could not defy Yoshiaki Tsutsumi, the disgraced former boss of the corporate group, prosecutors said.

"I wanted to file a correct report, but couldn't defy the former (Kokudo) chairman," he was quoted as telling prosecutors.

The revelations show that Tsutsumi, 70, who was arrested over the Seibu stock scandal, played a leading role in submitting a false report on the stakes owned by its shareholders.

Koyanagi was elevated to president of the railway company in April last year to replace his predecessor who had stepped down to take responsibility over the company's illegal payoffs to corporate racketeers.

Upon his appointment, Koyanagi learned that a massive number of shares owned by Kokudo, the key company in the Seibu group, had been disguised as those owned by individuals, according to investigators....the rest...

[Captain Japan]

I always sort of figured this is the case with all hot shots so I'm not sure how this is news. But there's some history here and I thought the "concrete homes" part was funny.
Fallen Seibu boss live like a king at company expense
Mainichi

As the public fixes its attention on the arrest of Yoshiaki Tsutsumi, the former boss of the Seibu Railway group and at one time the richest man in the world, light is also being shed on Tsutsumi's lifestyle before his arrest, including the luxury "company housing" he and others used.

In a quiet residential district in Tokyo's Suginami district, a fence 3 meters high surrounds a large residence known among locals as the "Seibu Mansion." Inside the 5,490-square-meter premises are three two-story concrete homes.

The owner of the land is the Seibu Railway Co.'s subsidiary Seibu Golf. A woman in her 50s who was familiar with Tsutsumi moved into the mansion with her children about 20 years ago. Sometimes she was seen leaving the residence in a chauffer-driven Jaguar, sometimes walking her pampered dog. A local housewife heard that the canine was fed "expensive beef fillets, cabbage and rice."

In the past, a sign reading "Seibu Golf Development Co. dormitory" stood in front of the two-story homes, and about four or five men in their 30s were living in them.

"The mansion had its own cook, and a refrigerator truck used to transport food inside," a resident living in the area said. Tsutsumi, who also drove a Jaguar, would also sometimes visit the residence....the rest...

[dimwit]

I always sort of figured this is the case with all hot shots so I'm not sure how this is news. But there's some history here and I thought the "concrete homes" part was funny.
Fallen Seibu boss live like a king at company expense

Holy Conrad Black! Is Seibu listed outside of Japan? I just wondering if he will be in store for the same treatment as Lord Black of Crossharbour.

[Mulboyne]

This should be fun. There was an earlier rumour that Goldman Sachs was going to bid but the company denied the report.

Kyodo via Yahoo: Morgan Stanley to offer to buy Seibu Railway Group
U.S. investment bank Morgan Stanley is set to offer to buy the Seibu Railway Co. group for 1.6 trillion yen to 2 trillion yen, the Nihon Keizai Shimbun reported Tuesday. The report said Morgan Stanley will offer to repay the entire 1.4 trillion yen in group interest-bearing debt in two to six months and set up a fund or investment partnership with institutional investors and financial institutions to purchase Seibu Railway shares.

[Mulboyne]

There was an earlier rumour that Goldman Sachs was going to bid but the company denied the report.

Well, it didn't take long this denial to appear.

Bloomberg: Morgan Stanley Denies Report on 2 Tln Yen Bid for Seibu Railway

Morgan Stanley, the world's biggest securities firm by market value, denied a Japanese news report it will arrange a bid of as much as 2 trillion yen ($19 billion) in cash and assumed debt for Japan's Seibu Railway Co. "Morgan Stanley is not working on such a bid," said Sumiko Iwadate, a spokeswoman for the bank in Tokyo... Goldman Sachs Group Inc., the third-biggest securities firm by capital, on March 25 denied a media report that it had made a bid to acquire the railway company. Nikkei reported today that Goldman Sachs may increase its offer for the company. The bank, which unofficially bid 900 billion yen, might offer to buy all of Seibu Railway for as much as 1,600 yen per share and repay all of parent Kokudo Corp.'s 480 billion yen in debt, the newspaper said. This would increase Goldman's offer to between 1.4 trillion yen and 1.5 trillion yen, Nikkei reported. Other U.S. investment banks and equity firms have made bids for Seibu Railway and its debt, Nikkei said.

[Captain Japan]

Here's round two...
Odakyu group admits falsifying statements
Asahi

The Tokyo Stock Exchange plans to ask Odakyu Electric Railway Co. and its three group companies to disclose more information after the four companies announced Wednesday that they falsified their financial statements.

The TSE will decide whether to delist the four First Section companies after they report details of their internal investigations, TSE officials said Thursday.

The Kanto region private railway operator and its three group companies announced Wednesday they will correct financial statements in which some of their shares had been registered under the names of individuals.

The three other companies are Odakyu Real Estate Co., Odakyu Construction Co. and Kanagawa Chuo Kotsu Co.

The shares of the four companies had been held under the names of directors and employees of the Odakyu group. Through that practice, the companies underreported their own shareholdings....more...

[L S]

So is a domino affect to the loaning institutions possible? something that coudl lead to gov't/treasury intervention?

PS - Hi! from Portland...

[Captain Japan]

This article is pretty good...
Tsutsumi Case Puts Japan's Lords of Business on Notice
Washington Post

But the case of Tsutsumi shows they can't avoid the spotlight entirely.

Yasujiro Tsutsumi, son of a poor rice farmer, founded what would become the Seibu group in the 1920s, buying land and railways by leveraging his political power as a national legislator. After Yasujiro dropped dead of a stroke while walking through Tokyo Station in 1964, Yoshiaki, his father's third son by a mistress, inherited the family's corporate dynasty -- including a private holding company named Kokudo Corp. and the publicly listed Seibu Railways Co.

Yoshiaki Tsutsumi demanded military-like reverence from employees. He built a sprawling mausoleum for his father with a ceremonial hall and imperial lion statue on one of the highest peaks in the picturesque Japanese town of Kamakura. Until last year, when the Seibu scandal began to unravel, rotating pairs of business-suited Seibu employees were forced to keep vigil at the grave site every night -- chasing away black crows from Yasujiro's granite gravestone and chiming a massive Buddhist bell at 6 a.m. The drill: 10 rings in 30-second intervals. Those who made errors, employees say, would be scolded, demoted or fired....more...

[L S]

The cults of keiretsu's slowly falling apart...but now the people know not where to go...

[Mulboyne]

The cults of keiretsu's slowly falling apart...

A bit faster now...
Bloomberg: Japan's Pension Fund Sued Seibu to Recover 4.3 Billion Yen

Japan's Pension Fund Association said it filed a lawsuit against Seibu Railway Co. and its parent Kokudo Corp., seeking compensation for investment losses resulting from the railway operator's false reporting of its shareholders' ownership record. The government-run retirement system for corporate employees is asking for 4.3 billion yen ($38.5 million) from the railway operator and the closely held developer, Tomomi Yano, executive managing director of the association said at a press conference in Tokyo.

[Mulboyne]

Bloomberg: Cerberus, Nikko Principal to Invest 160 Bln Yen in Seibu Group
Oct. 18 (Bloomberg) -- Cerberus Capital Management LP, a New York-based buyout fund, and Nikko Principal Investments Japan Ltd. will invest 160 billion yen ($1.4 billion) in the Seibu group, the Japanese railway and resort operator said. Cerberus and Nikko Principal have agreed to take stakes in businesses including Seibu Railway Co. and its parent Kokudo Corp... Cerberus will be the biggest single investor, with Nikko Principal taking a stake... Cerberus will hold no more than one-third of the Seibu group following the reorganization...The U.S. fund holds more than 60 percent of Aozora Bank Ltd. and agreed in December to buy a controlling stake in Kokusai Kogyo Co., which operates hotel, golf and leisure businesses in Japan and the U.S.

[Cubed]

The cults of keiretsu's slowly falling apart...but now the people know not where to go...

Mitsubishi, Sony/Panasonic (or is it Sony/Matsushita?), Toyota and Hitachi are all keiretsu and doing (mostly) very well.

From a purely economic perspective, it's amazing that many of the antiquated figures like Tsutsumi (who was once the richest man in the world) have survived after 15 years of recession. Look at the once-darling-of-the-Japanese-retail-industry - Sogo. Their 80's style interiors and gaudy marble entrances look vulgar and tired, much like their owners. Seibu stores look even worse!

[FG Lurker]

Mitsubishi, Sony/Panasonic (or is it Sony/Matsushita?), Toyota and Hitachi

Sony and Matsushita (which owns the Panasonic brand) are not related.

Look at the once-darling-of-the-Japanese-retail-industry - Sogo. Their 80's style interiors and gaudy marble entrances look vulgar and tired, much like their owners.

Something tells me you haven't seen Sogo's new Shinsaibashi store...

[dingosatemybaby]

Mitsubishi, Sony/Panasonic (or is it Sony/Matsushita?), Toyota and Hitachi

Sony and Matsushita (which owns the Panasonic brand) are not related.

Look at the once-darling-of-the-Japanese-retail-industry - Sogo. Their 80's style interiors and gaudy marble entrances look vulgar and tired, much like their owners.

Something tells me you haven't seen Sogo's new Shinsaibashi store...

Methinks the Shinsaibashi Sogo is the exception, not the rule. The Chiba and Yokohama, Sogo's "prestige" stores of the early 90's, are looking very, er, shopworn indeed. Fortunately, though, marble doesn't deteriorate as quickly as other building materials, so the bathrooms still look spiffy.

[FG Lurker]

Mitsubishi, Sony/Panasonic (or is it Sony/Matsushita?), Toyota and Hitachi

Sony and Matsushita (which owns the Panasonic brand) are not related.

Look at the once-darling-of-the-Japanese-retail-industry - Sogo. Their 80's style interiors and gaudy marble entrances look vulgar and tired, much like their owners.

Something tells me you haven't seen Sogo's new Shinsaibashi store...

Methinks the Shinsaibashi Sogo is the exception, not the rule. The Chiba and Yokohama, Sogo's "prestige" stores of the early 90's, are looking very, er, shopworn indeed. Fortunately, though, marble doesn't deteriorate as quickly as other building materials, so the bathrooms still look spiffy.

Actually what I meant is that Sogo has done the same thing again... They just opened a new store in Shinsaibashi just as pretentious as bubble-era stuff. I guess the Japanese don't think they look terrible...? (It looks "okay" today I suppose, but it is going to look very dated in a few years.)

[dingosatemybaby]

Mitsubishi, Sony/Panasonic (or is it Sony/Matsushita?), Toyota and Hitachi

Sony and Matsushita (which owns the Panasonic brand) are not related.

Look at the once-darling-of-the-Japanese-retail-industry - Sogo. Their 80's style interiors and gaudy marble entrances look vulgar and tired, much like their owners.

Something tells me you haven't seen Sogo's new Shinsaibashi store...

Methinks the Shinsaibashi Sogo is the exception, not the rule. The Chiba and Yokohama, Sogo's "prestige" stores of the early 90's, are looking very, er, shopworn indeed. Fortunately, though, marble doesn't deteriorate as quickly as other building materials, so the bathrooms still look spiffy.

Actually what I meant is that Sogo has done the same thing again... They just opened a new store in Shinsaibashi just as pretentious as bubble-era stuff. I guess the Japanese don't think they look terrible...? (It looks "okay" today I suppose, but it is going to look very dated in a few years.)

Totally agree. The chrome and bronze plating rubs off pretty quickly on these buildings, and 10 years on you're left with a linoleum-and-flourescent-tube hellhole (i.e., a typical Japanese building).

[Mulboyne]

Mitsubishi, Sony/Panasonic (or is it Sony/Matsushita?), Toyota and Hitachi are all keiretsu and doing (mostly) very well.

As FG Lurker mentioned, Sony has no capital relationship with Matsushita. Even so, the fact that there are successful or simply surviving business groups in Japan does not invalidate the claim that the keiretsu system is being dismantled. Specifically, that refers to the role of the "main bank" and the responsibilities of group companies to an ailing affiliate. Mitsubishi is probably a better case study in the problems caused by trying to maintain the keiretsu than a testament to its continued success.

Interestingly, "keiretsu" is almost regarded as a pejorative term in Japanese business circles. Softbank maintains a number of capital affiliates - admittedly without a bank at the centre - and yet no-one ever refers to this group as a keiretsu.

I came across this article on Bloomberg in which long-time Fidelity money manager, Yasuo Kuramoto, comments on the changes he has seen:

Kuramoto, who saw Japan's stock market boom in the 1980s and collapse in the 1990s as bad loans threatened banks, says Japanese companies have become more open because they can no longer rely on easy credit from lenders. As a result, they're giving Fidelity and other outside shareholders unprecedented access and working harder to generate returns... Kuramoto says the dismantling of Japan's "keiretsu" system of cross-shareholdings has spurred a shift in corporate priorities since last decade's stock-market crash. Prodded by government regulations aimed at making corporate finances more transparent, Japanese companies such as Shin-Etsu and Nissan Motor Co. are unwinding cross-shareholdings with banks and their own affiliates. The reduction of those stakes is clearing the way for outside investors. "The biggest and most significant change after the bubble burst is that companies began facing the shareholders rather than the financial institutions and group companies that used to be their major stakeholders," says Kuramoto.

[Cubed]

[FG Lurker]

[Mulboyne]

Sony has no capital relationship with Matsushita.

Quite mistaken. They're practically a husband-and-wife team! They each have competencies which balance each other so team up all the time on products and services

Not mistaken - "no capital relationship" being the key phrase

[Cubed]

Sony has no capital relationship with Matsushita.

Quite mistaken. They're practically a husband-and-wife team! They each have competencies which balance each other so team up all the time on products and services

Not mistaken - "no capital relationship" being the key phrase

Yes, that's true - it's not a capital relationship - I was checking you knew what you meant there

FG Lurker, check some simpler stuff like MD players, CD players and the like, all of the internals made by Matsushita. Newer mp3 stuff is made in Taiwan.

[FG Lurker]

FG Lurker, check some simpler stuff like MD players, CD players and the like, all of the internals made by Matsushita. Newer mp3 stuff is made in Taiwan.

Those are not major products which would imply that Sony & Matsushita are "practically a husband-and-wife team." (to quote)

Not mistaken - "no capital relationship" being the key phrase

Yes, that's true - it's not a capital relationship - I was checking you knew what you meant there

When I read that I figured you were just another newbie...But you've been on here since 2003! Guess you haven't read many of Mulboyne's posts. Or are a forever-newbie.

[cstaylor]

[quote="FG Lurker"]When I read that I figured you were just another newbie...But you've been on here since 2003! Guess you haven't read many of Mulboyne's posts. Or are a forever-newbie. ]
Cubed ran off with his tail between his legs after I whooped him bad in a programming language throw-down we had last year.

Guess it took him about a year to heal those wounds and return to FG public life.

All in jest, Cubed!

[Cubed]

When I read that I figured you were just another newbie...But you've been on here since 2003! Guess you haven't read many of Mulboyne's posts. Or are a forever-newbie. ]
Cubed ran off with his tail between his legs after I whooped him bad in a programming language throw-down we had last year.

Guess it took him about a year to heal those wounds and return to FG public life.

All in jest, Cubed!

You cheeky muppet.

I treat this forum like online gaming. I like coming here, and I can hold my own, especially against the less able or misinformed* but I don't do it too often because ultimately it is wasteful, self ingratiating and silly.

* yes, that means you Mr. Taylor. I whupped yer butt in that one - would you like me to post a link to the thread?

[Captain Japan]

Former richest man in world gets off with suspended sentence over Kokudo share scam
Mainichi

Yoshiaki Tsutsumi, former chairman of Kokudo Corp., the core firm of the Seibu railway group, and the one-time richest man in the world, was sentenced on Thursday to 30 months in prison, suspended for four years, for insider trading and for submitting false company financial statements.

The presiding judge in the case at the Tokyo District Court criticized Tsutsumi, 71, for leading the corporate crimes.

"As the head of the group, he masterminded the crimes. He should be strongly criticized," said Judge Tsutomu Tochigi when handing down the suspended sentence to Tsutsumi and a fine of 5 million yen.

As a reason for suspending the sentence, the judge said that Tsutsumi has already become the center of social criticism and the Seibu Railway Co. was delisted from the Tokyo Stock Exchange....more...

[gkanai]

I treat this forum like online gaming. I like coming here, and I can hold my own, especially against the less able or misinformed* but I don't do it too often because ultimately it is wasteful, self ingratiating and silly.

Keep dreamin' buddy, keep dreamin'...

[Buraku]

You need $1 billion to make this list
http://www.msnbc.msn.com/id/14927311/
For the first time in history, all of the Forbes 400 are billionaires