JH affiliates skirt anti-amakudari rule
Archiveless Gomiuri Shimbun
Affiliates of Japan Highway Public Corporation have got around a government policy aimed at ending amakudari (descent from heaven) appointments by creating new executive posts for their presidents, who formerly served as JH officials, The Yomiuri Shimbun has learned.
The number of former officials of JH who now serve as presidents of JH affiliates under the amakudari practice, in which retired senior bureaucrats land cushy jobs at private sector or quasi-governmental firms over which they previously had administrative jurisdiction, stood at 17 as of June, compared with 60 two years earlier.
The remarkable contraction has resulted from a Construction and Transport Ministry policy adopted in 2003 banning former JH officials from staying on or newly serving as presidents of any companies affiliated with JH. The policy is part of the government's efforts to reform and privatize the organization.
But The Yomiuri Shimbun learned Thursday that the number of JH officials who became executive board members, such as vice presidents, with the right to represent their respective companies--known as "representative directors"--at JH affiliates rose from 17 to 51 during the same period.
The threefold jump in the number of representative directors--a high-profile title usually shared by only a few board members, including presidents, that carries with it the responsibility to execute board meetings' decisions--has miffed officials of the Construction and Transport Ministry, which imposed the ban on taking up the post of president at JH affiliates to prevent corrupt business ties between the parent corporation and affiliates.
Many of presidents of JH affiliates have given up their posts but chosen to remain on the boards by creating the post of representative director. Some ministry officials have criticized this slippery tactic.
In March 2003, then Construction and Transport Minister Chikage Ogi announced a policy--which was endorsed by the government and the ruling coalition--to have all amakudari presidents of JH-affiliated firms step down by the time of the next shareholders meetings. Behind Ogi's decision was strong public criticism of the heavily indebted JH and its affiliates for their cozy ties, which were known to have resulted in a total of about 100 billion yen being pooled in JH affiliates' internal reserves.
According to a report compiled by the corporation, as of the end of June 2002, 60 out of 88 JH affiliates, including wholly owned companies, had former JH officials as presidents who had parachuted into the postretirement jobs through the amakudari practice. The comparable number decreased to 43 a year later and had shrunk further to 17 as of the end of June this year.
But at the same time, JH affiliates have created new executive posts, such as vice presidents and advisers with the right to represent companies as representative directors. As a result, the number of representative directors, excluding presidents, rose from 17 in 2002 to 29 in 2003 and to 51 at the end of June this year.
For example, the then president and representative director of Nakanippon Doro Service, a JH-affiliated toll collection company in Nagoya, stepped down at a shareholders meeting in June. But the former president, who used to be a deputy chief of the Tokyo No. 1 Construction Bureau of the public corporation, immediately assumed the newly created post of vice president and representative director.
His successor, a private sector businessman, shows up in the Nagoya company only once a week as he resides in Tokyo.
In Osaka, the then president and representative director of West Patrol, which undertakes traffic control operations, retired in June. The man, who had headed the Osaka Regional Bureau of JH, has since been serving as advisor and representative director, earning a higher salary than the new president.
A Tokyo-based highway systems maintenance service company, Higashi-Kanto, abolished the post of president itself in June. The then president and representative director quit, but now serves as vice president and representative director. The affiliate said the matter was an internal affair and refused to make any comment on the structural change.
