Japan Post Holdings Co. and leasing firm Orix Corp. have agreed to cancel their controversial ¥10.9 billion deal involving dozens of Kampo no Yado inns and housing facilities, communications minister Kunio Hatoyama said Friday.
Japan Post President Yoshifumi Nishikawa made the request Monday during a meeting with Orix Chairman Yoshihiko Miyauchi, and Miyauchi accepted, Hatoyama told reporters after speaking with Nishikawa.
Japan Post and Orix are expected to make a formal announcement Monday.
Orix made the winning bid for a lump-sum purchase of the nationwide 70-strong Kampo no Yado inn network and nine housing facilities in Tokyo, but Hatoyama cast doubt on the bidding process and the exceptionally low price.
Hatoyama said the issue of Nishikawa resigning as Japan Post president over the controversy was not discussed.
The money-losing Kampo no Yado network was developed for customers of Kampo postal life insurance policies before the postal system privatization started in October 2007. It has been losing about ¥4 billion annually.
Japan Post is expected to look at other options to get rid of the network, including selling each inn individually.