Japan Post’s public focus is back: Saito

Most board members replaced

Compiled From Kyodo, Staff Report

Newly appointed Japan Post Holdings Co. President Jiro Saito said Wednesday the group will place more importance on services of a public nature, in line with the policy of the Democratic Party of Japan-led government.

The comment underlined a clear shift from the profit-driven policies implemented by former Prime Minister Junichiro Koizumi, who started the postal privatization process, to emphasize the public nature of the postal and financial giant’s business.

He also said Japan’s postal business has had a strong public nature since its establishment, similar to that of the electric power companies.

Saito also said a nationwide network of post offices will play a role to support local administrative services.

“The government decision (earlier this month) clearly shows it will utilize post offices as administrative bases,” Saito told a news conference at Japan Post’s headquarters in Chiyoda Ward. “Its link to the government will become an important theme of Japan Post’s business in the future.”

At the same time, the postal group also has to stay away from hampering the private sector, the former vice finance minister said.

“By cooperating with these (local financial) institutions, such as by extending joint financing, I hope we can find out steps to work together with them,” he added.

Saito did not rule out the possibility of selling Japan Post shares currently owned by the government, if the business model goes well in the future.

Earlier Wednesday, Saito was appointed Japan Post Holdings president during an extraordinary shareholders’ meeting and a board meeting.

Many of Japan Post’s board members are also expected to be replaced, with only two of the current nine members retaining their posts. Two former bureaucrats were appointed as deputy presidents.

“This is a historic day,” said Shizuka Kamei, the state minister in charge of postal reforms and an arch foe of privatization.

Under the new management, Yoshifumi Nishikawa resigned as Japan Post president at a board meeting Wednesday morning. He had overseen Japan Post’s privatization since it began in October 2007.

Saito formally became president following approval from the corporation’s sole shareholder — the government — as well as that of the Internal Affairs and Communications Ministry, which oversees the postal system.

The government argues that the quality of Japan Post’s services has deteriorated since privatization got under way. Putting the organization in private hands was the signature reform of former Prime Minister Junichiro Koizumi of the Liberal Democratic Party.

Besides Saito and the two deputy presidents, Japan Post now has two new deputy chiefs and 11 new outside directors.

With Chairman Takashi Nishioka, who also serves as an adviser to Mitsubishi Heavy Industries Ltd., and Hiroshi Okuda, a senior Toyota Motor Corp. adviser, the entity’s board now has 18 members, double the number of the previous board. Most of the previous directors, who were drawn from the private sector, resigned the same day.

Japan Chamber of Commerce and Industry Chairman Tadashi Okamura, former Hitotsubashi University President Hiromitsu Ishi and former Prosecutor General Akio Harada are among the new outside directors.

The Hatoyama government has come under fire for installing two former bureaucrats in the new management, as the appointments run counter to its key pledge of wresting power from bureaucrats.

But Prime Minister Yukio Hatoyama defended the appointments, saying Saito has 14 years of experience in the private sector after retiring as a bureaucrat.

“I believe he is competent and the right person should be placed in the right position,” he said in a plenary session of the Lower House. “We just have to see how he manages.”

Chief Cabinet Secretary Hirofumi Hirano also rebutted the claim, telling reporters, “I just expect to see a new management that can steadily proceed with postal reform in line with our policy,” saying it doesn’t matter if top Japan Post officials include ex-bureaucrats.

Saito also stressed the importance of having the two former bureaucrats in management in order to offer administrative services in accordance with the government’s policy. “Someone with administrative experience” is necessary to ensure that, he said. “The link with the government will be a major theme in our future operations.”

The 10-year process of privatizing state-run postal services began in October 2007 under Koizumi’s government, which created four companies to provide mail delivery, banking, insurance and over-the-counter services under the Japan Post umbrella.

The government plans to review Japan Post’s structure while working with Saito, who was previously president of Tokyo Financial Exchange Inc.

Under the original privatization plan, Japan Post was to have sold off shares its banking and insurance units, becoming a listed company, with the government retaining a one-third stake and its oversight of postal services.