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Corrupt Postal Privatization 7

Japanese largest circulation newspaper " the Yomiuri Shimbun" reported on January 10, 2009 in its English language version daily "the Yomiuri  Daily". Headline reads 'Japan Post-Orix Deal 'Suspcicious'/LDP's Hatoyama among critics of Kanpo no Yado Inns.

「Internal Affairs and Communications Minister Kunio Hatoyama has stirred up controversy by voicing opposition to a Japan Post plan to sell all of its Kampo no Yado inns to Orix Corp.

The issue will likely be discussed in the Diet and by various government bodies. It has emerged as a key dispute relating to the privatization of postal businesses.

"It's possible the public will see the deal as a rigged race. I want Japan Post to reconsider it," Hatoyama told reporters Tuesday evening in Tokyo.

Explaining the reason for his opposition to the bulk sale of the inns, Hatoyama said, "We mustn't do anything that might draw suspicion. [And Orix] Chairman Yoshihiko Miyauchi participated extensively in discussions relating to postal privatization."

On Dec. 26, about 10 days before the minister's remark, Japan Post Holdings Co. announced its decision to sell all the inns to Orix Real Estate Corp., an Orix subsidiary.

Hatoyama said he had doubts about the decision after hearing the announcement. He said the reason for and the process of selecting Orix were not clear, nor was the decision by Japan Post to sell the inns in the middle of a recession and to sell them all at once.

Hatoyama ordered his ministry to examine the selection process that led to Orix being chosen as the buyer.

He also consulted aides of Prime Minister Taro Aso--including Shunichi Yamaguchi, the prime minister's adviser in charge of revitalization of provincial regions--and decided to present his view that Japan Post should reconsider the deal.

Miyauchi served as chairman of the government's council for regulatory reform under the administration of then Prime Minister Junichiro Koizumi.

Miyauchi is seen as one of the leading players in the structural reform drive conducted by Koizumi and former Internal Affairs and Communications Minister Heizo Takenaka, now a Keio University professor.

Hatoyama has recently been critical of the structural reform drive and about the postal privatization of which he has said a drastic review is necessary.

Some politicians pointed out that underlying Hatoyama's remark was the involvement in the deal of the Orix chairman.

On Tuesday evening, Hatoyama said, "I'm not a free-market fundamentalist at all," and, "My way of thinking is different from Mr. Miyauchi's"

The government owns all shares in Japan Post. To spin off the operation of Kampo no Yado inns as a new company, approval of the internal affairs and communications minister is necessary under laws related to postal privatization.

"It's highly likely I won't give my approval," Hatoyama said. But politicians close to him said Hatoyama expects Japan Post will rethink its decision without his having to withhold approval.

Some political observers said it would be irrational for the government to intervene in a deal with a private company. But a high-ranking government official supported Hatoyama on Thursday.

"The deal is too suspicious. Why is a private company able to buy up the people's assets at such low prices?" the official said.

The Democratic Party of Japan and other opposition parties also see the deal with Orix as problematic, and plan to summon Miyauchi and Japan Post Holdings Co. President Yoshifumi Nishikawa as unsworn witnesses in front of the House of Representatives Budget Committee to ask questions about the deal.

Yukio Edano, former chairman of the DPJ's Policy Research Council, who is a director of the Budget Committee, told reporters in the Diet building on Thursday: "It's really shameless. In setting up a flow of events that would allow such a deal, the actions of Japan Post have been odd."

At an informal meeting Thursday, executives of the lower house's Committee on Internal Affairs and Communications demanded that thet the ministry submit detailed documentation of the deal with Orix. 」

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