Freezing the government selloff of its shares in the Japan Post group units is priority-one in revamping the privatization process, Internal Affairs and Communications Minister Kazuhiro Haraguchi said Thursday.
He also said that in close cooperation with postal reform minister Shizuka Kamei, he will urge Japan Post Holdings President Yoshifumi Nishikawa to step down along with other executives appointed under the ousted Liberal Democratic Party administration.
Under the privatization process initiated by the LDP-led government, four units — Japan Post Bank Co., Japan Post Insurance Co., Japan Post Service Co. and Japan Post Network Co. — and their holding company were spun off from Japan Post two years ago.
Haraguchi said the spinoff is not working well, but he stopped short of saying how the four units should be reorganized.
“Losses are made by spinning off the four units. With such losses, it has been pointed out that it is hard to manage a sustainable business,” Haraguchi said during a group interview.
“To change the situation, we’re going to freeze the sale of the stocks planned for the next year, and then will have Kamei hammer out a draft reorganization plan.”
A bill to freeze the stock sale will be submitted to the extraordinary Diet session that begins later this month, he added.
Under the plan as it now stands, the government will sell its Japan Post Bank and Japan Post Insurance shares next fiscal year and those of the holding company in fiscal 2017.
Haraguchi agreed that privatization by selling the government-owned shares has some good points because it could improve governance of the entities and financial transparency.
“But still, the current form (of the Japan Post group) was created in too rough a fashion and people are losing their right to receive postal services,” he said.
Privatization was aimed at making postal services efficient and getting the money held by the postal bank and insurance services to flow into financial markets, instead of being used solely for the government’s fiscal investment and loan programs.
While the two financial units have been profitable, many parts of the mail delivery services are running deeply in the red.