My opinion of this week(394):

Symbol of closed society

After a month long dispute concerning a new entry to Japanese Professional
Baseball League has finally been settled. Rakuten has been elected.Livedoor's
application has been turned down although the firm expressed their plan
for new entry to Sendai district prior to Rakuten.

Mr.Shigeo Sumida wrote his comment in ML on this. "This is what I expect to
happen from the beginning as many other people do. It is certainly an unfair
decision making process by itself. The whole process is to reject a kind of
dangerous outsider such as Livedoor which is fast growing in IT business but
intolerable heresy for conventional business world."

I fully agreed with what Mr.Sumida said. Rakuten is in the same business as
Livedoor. But Rakuten is not outsider in business community at all for 
President Mikitani keeps a good contacts with many top leaders in business 
communities including Japanese professional baseball world.

I don't like what President Mikitani said at the news conference after 
Rakuten had been selected as a new team to Pacific League starting next
spring. "This is really a great accomplishment. This new entry has happened 
first time after 50 years. " 

What is he talking about? What's in the world there exists such organization
which stays as it is for fifty years without any changes. The existence of
such organization itself implies some problems. It implies a closed nature 
of the whole organization and that is why Japanese professional baseball
world is now in trouble.

Who have built up and kept such a closed society for many years without 
making any necessary changes? Those owners of ball clubs selected Rakuten
in order to keep their closed circle rejecting Livedoor which is too 
dangerous for their existence. 

The first response of citizens of Sendai was very fair when they heard  
the news. Many of them said Livedoor would have been selected as their
franchised team. This is because Livedoor expressed their intension to
come to Sendai first before Rakuten. However,  citizens of Sendai will 
also forget about this by next April when a new year season start at 
their ball stadium. The stadium will be filled with the crowd in April
and Rakuten's new entry will be praised as a big success.

But is that all? The question is how much of change of whole Japanese 
professional world will be accomplished by Rakuten's new entry at this
time. It seems there will be no change at all as far as management of 
existing clubs are concerned. Many of owners of existing clubs commented
at the news conference after their decision:"Well, management of baseball
clubs under this circumstances is very difficult any way. We will not
accept any more new entries for a while at any rate."
 
Why is it? They should accept many more new entries including Livedoor.
Why don't they introduce reshuffling system as such made in Japan Soccer 
League? Reshuffling is supposed to be made between major leagues and minor
leagues at the end of every seasons. 

Market is to be opened more widely so that there will be more severe 
competition between existing ball clubs. I believe this is one of the most
important thing for Japanese professional baseball world to survive and
to make  further development in the year to come.

2004/11/6
Tadashi HAYASE

My opinion of this week(395):

Abolishment of public listing of Seibu Railway Corporation's share

The title of My opinion of last week was "symbol of closed society". I wrote
about closed nature of Japanese professional baseball organization which
is the symbol of closed Japanese society by itself. One very symbolic
accident happened this week which concerns with what I wrote about. 

Seibu Lions became a champion of Japan Series this year after severe 
season games and playoff games in Pacific League and games with 
Chunichi Dragons, the champion of Central League. Players and team staffs
including are to be praised for their great effort and achievement. They
have, of course, no sin and responsibility for what happened for parent
firm. 

But how shameful the management of parent company is for what they have
done so far! The owner of Seibu Lions is Kokudo Keikaku Corporation, 
the largest shareholders of Seibu Railway Corporation. The chairman of 
Kokudo Keikaku was Yoshiaki Tutumi who resigned from the position in 
April when some of other scandals were disclosed about Seibu Railway
Corporation.

From sometime around April this years, several scandals on Seibu Railway
Corporation including unlawful processing of financial statements have 
been disclosed. The fatal evil conduct done by management was that
the  management of the firm tried to sell shares of Seibu Railway to 
other firms in connection before those scandals are fully disclosed to
the public. That is obvious unlawful insider transaction.

Tokyo Stock Exchange decided to stop listing Seibu's shares on the market
in this week after series of such misconducts by Seibu. That is a natural
consequence of what happened so far.

But I believe that this should have happen much earlier as far as
Seibu Railway and Kokudo Keikaku are concerned. The fact that those 
concerns have been doing some unlawful processing of financial statements
were kind of open secrets for many years, There were several exposure
articles by mass media concerning their unlawful processing of financial
statements in the past. Many professionals of accounting and auditing 
must have thought that the disclosure of the matter at this time was too
slow. 

The public authorities, including tax office, should have taken some 
proper actions much earlier based on their more objective and lawful
research concerning their financial statements. 

The top management and the  board of director are totally  responsible
for the scandal, of course. But it is obvious  that auditing function
has not been working at all in this firm. What has the professional
accounting auditing firm in charge of this firm been doing so far? How 
have  corporate auditors been functioning as Japanese Commercial Code 
lays down? 

There exists such definite corporate governance system in Japan as in 
other country like US. But the corporate governance system  has not 
been functioning at all in this firm. Why?

This is because the firm has totally been owned and controlled by Yoshiaki 
Tutumi and their families. The concerns are not really open and public
corporation pre se. There still exists many of such firms of same kind
in Japanese business worlds.

Prosecution and punishment for top management of Seibu concerns will 
start from now. It is our great concern how they will be punished to
make Japanese business world more fair and open one.

2004/11/13
Tadashi HAYASE

My opinion of this week(396):

Shifting Seibu Railway Corporation stock to JASDAQ

In my opinion of last week, I wrote about the scandals of Seibu Railway
Corporation. Tokyo Stock Exchange announced the abolishment of Seibu's
stock listing from the market because of unfair treatment on their 
financial statements. I had written  that the decision was quite right and
many of those management people should be punished for their misconducts.

However,I was surprised to see the news what followed after it. Although
Seibu's stock listing was abolished at Tokyo Stock Exchange, they are going
to be listed at JASDAQ, over the counter market for small and medium size
companies.Their application will be accepted soon on and around December 13.
Several media reported that the stock would be listed without any problems
for the hurdle of criteria for listing is much lower compared with those of
Tokyo Stock Exchange. It is very possible that Seibu will easily overcome
those hurdles. 

Kazuo Kitagawa, Minister of Land, Infrastructure and Transportation said
he understood the necessity of Seibu's application for JASDAQ for it is 
necessary for them to transact their stocks through open market, although
he mentioned that Seibu should improve their basic management structure of
the corporation. 

I was amazed to read those news.  What in the world are those people 
concerned doing? Seibu has conducted some serious unfair practices as a
public corporation. Their financial statements were wrong and unlawful. 
Some more complete research and investigation should be made and some 
punishment should be conducted before talking about shifting to JASADAQ 
from Tokyo Stock Exchange.   

Are criteria hurdle for listing of JASDAQ lower than those of Tokyo Stock
Exchange?  Never! 

Criteria of listing for JASDAQ say:

・In order for any firms to apply for listing for JASDAQ, it is necessary
  to fulfill all criteria of listing settled by Japan  Stock Exchange 
  Association. (Tokyo Stock Exchange is, of course a member of the 
  Association.)

・All financial statements of two prior accounting terms of applicants 
  are fair and right with proper auditing.

Those conditions mentioned here are quite natural and it is obvious that
application of Seibu to JASDAQ does not meet those condition.

It seems that both the Government and stock exchange markets are trying to
avoid any more confusion involved with this issue for Seibu Railway is
such a company of public nature. They took the easy way out avoiding some
more confusion expected.

I daresay that this is another typical example of closed nature of Japanese
society.  

2004/11/20
Tadashi HAYASE

My opinion of this week(397):

BLOG and ML are good ways for improvement

I read the article in Sankei Shinbun Newspaper of November 25th. The research
made by Japan Media Center in  Chiba Prefecture revealed that language 
capacity of Japanese college students is now very poor. 6% of student of 
National Universities, 20% of students of private universities have only
middle high school student level concerning Japanese language capacity. 

For example, the word "ureeru" means "worry". But 67% of students tested
answered it means "be pleased". "kaijyu suru" means "conciliate". But
Almost none made right answer. The report really worried ("ureeru") about
the situation.

The news further reported that three universities in Saitama Prefecture
started several basic Japanese language education in order to meet this 
situation and they quickly improved their capacity. Well, that's the way
it is. The issue is now how all Japanese universities should tackle this 
very important task.

In addition to the practice of such basic Japanese education, I would like
to suggest to start teaching e-mail and BLOG at classes of arts and 
sciences so that capacity of Japanese language  as well as of PC and 
internet can be trained. 

When it comes to mail, most students have custom of doing handy phone mails 
these days. Since handy phone mail is only exchange of short and simple
information, ordinal e-mail using PC and internet should be used for
educational purpose. If I were a teacher at arts and sciences course of
a college, I would request students to present all reports through e-mail
and/or BLOG. Teachers who are involved with such teaching methods must be
very busy but students will learn lot more through exchange of mails 
between students each other and many other people in net in addition to
teachers.

Japanese language capacity is not only one issue. Students are requested
to be trained for higher capacity for way of thinking and presentation of
their ideas and thoughts. 

Mailing list and/or BLOG are very good methodologies to be used in college
class rooms  to accomplish improvement of language capacity of Japanese 
students in narrow and wide sense.

2004/11/27
Tadashi HAYASE