Biz Improvement Order Issued to Japan Post over "Kampo no Yado" Deal

Tokyo, April 3 (Jiji Press)--Internal Affairs and Communications
Minster Kunio Hatoyama issued a business improvement order to Japan Post Holdings Co. Friday over its lax handling of bidding procedures for the sale of its "Kampo no Yado" resort inns.

It is the first time for Japan Post to receive such an order since
the start of its privatization process in October 2007. Hatoyama requested
the firm to submit a report on its improvement steps by the end of June.
Japan Post President Yoshifumi Nishikawa said that he would take
the order seriously and launch appropriate steps.
After giving the order to Japan Post in a meeting with Nishikawa,
Hatoyama told a press conference that Japan Post lacks awareness of its
responsibility for the assets shared by all Japanese.
Hatoyama pointed out 16 problems related to the procedures for the
Kampo no Yado sale, which was cancelled in February after Hatoyama argued
the deal lacked transparency.
The minister particularly blamed Japan Post for not considering
seriously recommendation made twice by its finance advisor for cancellation
of the sale. He also expressed strong discontent with the firm giving high
marks to Orix Real Estate Corp. despite the fact that a hotel operator
offered better working conditions for Kampo no Yado employees.
Hatoyama said there are enough reasons to suspect that the bid
winner was decided beforehand.
Late last year, Japan Post signed a contract to sell the 70 inns
and other properties in a single package to Orix Real Estate, a unit of
major leasing firm Orix Corp. <8591>, whose Chairman Yoshihiko Miyauchi had
been involved in discussions on postal privatization as the head of the
government's regulatory reform panel.
The company is required by law to sell all Kampo no Yado facilities
by September 2012 as part of its privatization process.