State control of Japanese postal holding firm to be limited

The government has unveiled its outline of bills for privatizing the country’s postal operations, which will oblige the state to sell two-thirds of its stake in a proposed postal services holding company by the end of March 2017.

The outline, compiled by the government’s preparatory office for postal business privatization scheduled for April 2007, was shown to the ministries and agencies concerned on Friday.

To realize a smooth transition to the privatization takeoff day, the office proposed that Japan Post–the existing postal services public corporation–be transformed into the government’s wholly owned company during the transition period to 2007.

The holding company will then set up two subsidiaries–a preparatory company to take over kampo postal insurance services and another preparing for the eventual establishment of a postal savings bank–during the same transition period, according to the outline.

Between 2007 and 2017–the target year for full privatization–the government will be legally required to slash its ownership in Japan Post to “the vicinity of one-third of the overall stake,” the preparatory office said.

The ministries and agencies concerned will refine the wording of the related bills while the government, which wants the bills submitted to the Diet as early as possible, will be holding further talks with the Liberal Democratic Party.

The government envisages an obligation for the holding company–Japan Post–to sell all shares of both the postal savings company and the postal insurance company during the 2007-17 transition period for complete privatization. After April 2007, the two subsidiaries will be granted banking and insurance service licenses, respectively