Japan SESC to Probe Japan Post
Japan’s Securities and Exchange Surveillance Commission will launch its first-ever investigation into Japan Post on Feb. 5 to mainly examine the corporation’s sales practices for investment trust funds, informed sources said Tuesday. Japan Post began selling such funds in October 2005. The products are now sold at 1,155 post offices nationwide, up sharply from the initial 575 offices.
As of the end of last December, the balance of funds sold by the to-be-privatized governmental body stood at 561.6 billion yen, matching a level achieved by a major regional bank.
The SESC, the securities industry watchdog, has concluded that Japan Post needs to be investigated because reports of customer complaints have increased in step with the sharp rise in the corporation’s fund sales, the sources told Jiji Press.
The SESC has informed Japan Post of its planned investigation. The commission will recommend administrative penalties if it discovers any serious irregularities.
Separately, the Financial Services Agency last November started investigations into Japan Post to examine the corporation’s risk management system.
Japan Post will be broken up into four firms, including the “Yucho” bank and the “Kampo” insurer, as part of a 10-year privatization process starting in October this year.
The two institutions will emerge as the largest players in the Japanese banking and insurance industries. The FSA hopes to look closely at the giant institutions because Japan’s financial system could be significantly affected if any problems occurred at either of the two firms.
