Japanese Government to sell stake in privatised postal savings and insurance
The government has decided to sell its entire stake in postal savings and insurance units by the 2017 end of a controversial proposal to privatise Japan’s postal system over a 10-year period, government sources said Monday.
The decision is part of an outline of legislations to privatise Japan Post in the face of strong reservation within the ruling Liberal Democratic Party.
The outline is expected to be announced later in the day after Prime Minister Junichiro Koizumi conveys it to ministers at a morning meeting.
The government has also decided to set up a 1 trillion yen fund to make up for possible losses from providing the postal savings and insurance services in thinly populated communities as a result of maintaining uniform nationwide operations at the two privatised entities, the sources said.
The government intends to present the outline to a meeting Tuesday with LDP lawmakers and hopes to get the LDP’s endorsement as early as in mid-April for submission to parliament later in the month, they said.
The outline will specify a plan that a holding company to be set up by the government will sell its stakes in the postal savings and insurance units in stages by taking into consideration the results of their business performance every three years, according to the sources.
But even after the two units are fully privatised, the holding company will be allowed to buy back some of the shares it sold, the sources said.
The step is an apparent compromise as postal privatisation minister Heizo Takenaka has called for the sale of the entire stake in 10 years after the split of Japan Post to realise a full privatisation of the massive financial services that have been provided by post offices, which involve some 300 trillion yen in funds.
Internal Affairs and Communications Minister Taro Aso is against it.
Aso has urged that the holding company retain a certain amount of shares to ensure a unity in the management of Japan Post’s four spinoffs.
Besides these decisions, the outline will include measures to counter hostile takeover bids, the sources said.
It will also has a provision to permit a maximum six-month postponement to the planned start in April 2007 of a 10-year privatisation process if the development of computer systems is determined to be unable to be completed in time, they said.
While legally requiring post offices to operate evenly throughout the country, the outline will have a provision to exclude parcel delivery services from this requirement, they said.
The outline will also include a provision to create a status similar to public servant for postal employees who deliver government mail.
Under the government plan, Japan Post would be split into four business units — those mentioned above plus two others in charge of mail delivery and the management of the network of post offices, under a holding company at the outset of the 10-year privatisation process.
