Japan Post punishes 34 officials for huge loss from unfair deal

Japan Post said Friday it has punished 34 of its officials for causing a 2.7 billion yen loss with an unfair bulk mail service deal at the Nagaoka post office in Niigata Prefecture.

In addition to the punishments, including salary cuts and admonitory warnings, Japan Post plans to file damages suits against some of the officials and a direct mail agency involved in the deal.

The Nagaoka office had collected only 2.6 billion yen of 5.3 billion yen in postage for 120 million pieces of mail from the Tokyo-based direct mail agency during the 19 months between June 2002 and December 2003, Japan Post said.

The office gave preferential treatment to the agency in violation of internal regulations for accepting such mail under the separate postage payment system.

Under the system, a sender is not required to place stamps on mail but needs to indicate on the mail itself that the system is being used. The postage discount rates run from 4 percent to 40 percent. Frequent users of the system include direct mail firms and their agents.

Japan Post regulations require users of the system to receive checks on the amount of mail by post office employees and to pay the fees on the same day the mail is sent.

But in the case of the deal in question, the mail amount check and pay settlement were done on later dates.

The Nagaoka office launched the bulk mail service for the direct mail agency in 1999.

Japan Post began investigating the deal after it was informed about the deal around November 2003.