Takafumi Horie, whom long term sufferers of this venal institution will remember as the t-shirt wearing CEO of internet service provider livedoor, upset Japanese media harmony earlier this year when he announced he had just purchased, via after-hours trading, 35% of Nippon Hoso (Nippon Broadcasting Systems).
NBS is one of Japan's largest radio companies and it also happens to control 12% of Fuji Television, Japan's number one TV station and the happy purveyor of such joys as “Hey! Hey! Hey! Music Champ” and “SMAPxSMAP”. This is part of a cozy relationship in which Fuji also owns 12% of NBS. By owning NBS, Horie would become the largest shareholder in Fuji TV and could begin making decisions “on Fuji's behalf” (wink-wink nudge-nudge).
To much of the West, this kind of takeover is pretty much old-news and, even in Japan, takeovers, hostile or otherwise, while not particularly common, are nothing particularly new. However, Horie violated three unwritten commandments of Japanese mergers and acquisitions: 1) Fair warning being necessary for the preservation of inter-company hegemony, thou shalt not act in secrecy nor without giving fair warning to the acquired; 2) A stable, docile media being necessary for the preservation of the state, thou shalt not attempt to acquire a TV station; 3) Whatever thou doest, thou shalt not useth foreign money to do it. (Horie's funded his takeover with a bond issue purchased primarily by Lehman Brothers.)
There thus ensued a stunning battle of the suits versus the t-shirt in which the suits tried every dirty trick they could imagine while the rest of the Japanese media circled wagons around the suits. In one particularly memorable moment on a nightly TV Tokyo program called World Business Satellite, Horie had been invited to the show to discuss both his acquisition and Fuji TV's hasty acquisition of an additional 13% of NBS's shares. (By acquiring 25% of NBS, Fuji TV could veto any attempts by Horie to directly run Fuji TV.) In the past, Horie'd been treated as a kind of goofy rock star on the show. This time he faced the first truly hostile interview your humble editor has ever seen on Japanese TV. One panel member kept asking Horie about his intentions. Horie said NBS was undervalued (more on that later) and he thought it would be a good investment. Not satisfied with this, the panel member kept insisting the purchase was a power play and kept asking why Horie needed 35% of NBS's shares, to which Horie asked “Why does Fuji need 25%?” The female anchor, a sophisticated looking ditz who clearly knows very little about business, spent the interview laughing uncomfortably. She then tried to smooth things over by “clarifying” the panel member's concern. This only succeeded in creating more tension. Horie, who was dressed for the occasion in a gray t-shirt with matching Members Only style jacket, seemed genuinely surprised that the staff of World Business Satellite didn't seem to understand either business or stocks.
The media also gave voice to the second group of wagon circlers: the Japanese business community. Hisahi Hieda, the chairman of Fuji TV dismissed Horie's “money money” attitude as “old-fashioned.” (The Japanese business community being, you see, so forward thinking.) Even more unusual, Hiroshi Okuda, Chairman of the Board of Toyota and the head of Nippon Keidanren (Japanese Business Federation) said “(Horie) has been criticized by people in political and business circles for having done something morally wrong, because it is the worst thing in Japanese society to think that if you have money, you can do anything.” Okuda then continued by adding “Mr. Horie should humbly accept the criticism. He should clarify if his bid is based on long term business strategy or if it is just to make money.” One is free to ask what the exact difference is between “long term business strategy” and “making money”, however, Okuda may have been referring to the rumor that Horie was seeking a greenmail offer. Either way, that's one of those “Quotes You Don't Want To Hear From The Head Of Your Business Federation.” (By collossal coincidence, Toyota owns over 100,000 shares of NBS.)
The most interesting attacks came from Akinobu Kamebuchi, the president of NBS. He pulled out all the rhetorical stops by saying “Horie comments that Fuji TV was pressuring (NBS) by saying he's young. And while he clearly has everything, the young make mistakes and as people get older they stop making mistakes although life gets less interesting. I like young people and think they're the future. I used to work as a DJ for a radio show popular with youth.” This, in “South Park” terminology, is called the “Chewbacca Defense”, i.e. bring up something absurd and unrelated in an attempt to muddy the point. Kamebuchi then went on to launch a FOX attack: “Some people say Horie launched a terrorist attack against the Japanese stock market.” He said that Horie's after-hours trading, while not illegal, was against the spirit of the Tokyo Stock Exchange. (NB: By trading after hours, Horie was freed from normal disclosure rules which kick in when a person acquires 10% of a company's shares.)
Fuji, for it's part, attempted a clumsy poison-pill effort by seeking to issue warrants for new shares. Their plan was to double the number of shares and give all the new shares too directly to Fuji TV. This would, in effect, dilute Horie's ownership to 17.5% while upping Fuji's to 75%. (This was struck down in court as it amounted to stealing shares from every shareholder who wasn't Fuji TV.) Fearing Horie would use NBS assets in a leveraged buyout of Fuji TV, NBS tried to jettison it's key assets by selling music and movie producer PonyCanyon to Fuji TV and later “loaned” its Fuji TV shares to rival internet company SoftBank under a five year deal in which SoftBank could return the shares at anytime but NBS could not ask for them back. Several key NBS radio stars swore they'd never work for Horie and the general employees wrote a letter saying they could never feel affection for Horie and wished he would stop his takeover attempt.
In defense of the old guard, there is some question about how Horie was able to acquire so many shares so fast—he apparently got the bulk of his 35% in less than 30 minutes—and some wonder whether or not he pre-arranged the after hours purchase, which would be a violation of TSE rules. (This may have been the criticism to which Okuda was referring.) However, even fewer have pointed out that Fuji was in the process of making a tender offer to gain control of NBS itself and that NBS's shares had conveniently fallen to a more reasonable price over the last few months. Thus, Horie saw they were undervalued and made his move.
Now, it seems that everyone is getting friendly. Horie has over 50% of NBS shares while Fuji has acquired around 35%. Because the top ten shareholders have over 80% of the total issue, the stock will soon be delisted from the Tokyo Stock Exchange. Horie will be able to stack the board in the June shareholders meeting and all sides are now finding ways to work together.
NHK has suffered a series of scandals since late last year and its half-hearted attempts at damage control have led nearly half-a-million households to refuse to pay their NHK fees.
The scandals began under the regime of Katsuji Ebisawa. The first thing people noticed was that a large number of NHK dramas began to be set in Ibaraki Prefecture, including Neba no Onna (Sticky Woman) starring Naoko Iijima as a city girl who inherits her father's natto factory. (By collossal coincidence, Ebisawa is from Ibaraki.)
This in itself, while odd, was not considered terribly scandalous. However, last year, it was discovered that several NHK staff members had embezzeled money, one in excess of 400,000 dollars, and others had received expense reimbursements for ficticious business trips. Ebisawa was eventually forced to resign as head of NHK and this would have been the end of things except 1) he is still on the NHK payroll and 2) his successor offered him a position as an official advisor. What's more, the day he “resigned” Ebisawa angered a lot of people by playing the role of martyr. He even went so far as to compare himself to a legendary hero who was expelled from his homeland by the forces of evil.
Ebisawa eventually turned down the advisory position but the damage was done. NHK is now prediticing that 700,000 households will refuse to pay their NHK fees. Your humble editor was part of that group a long time ago.
In 1970s, the World's Fair Exposition in Osaka announced to the world that Japan had arrived as a modern economic force. Now, 35 years later, the current World Expo in Nagoya seems to be sending a different message.
Although the theme of the Expo celebrates environmental sustainablility—the buildings are recyclable, some have plants growing on the walls to act as insulation and visitors have to negotiate a dozen different types of trash cans in order to throw away their garbage—the Expo site is built in an area that used to be a pristine forest.
Also, because organizers had initially banned outside food and drinks from the Expo, security guards confiscated any bottles, cans or boxed-lunches visitors tried to bring. Those materials were then disposed of en masse rather than being sorted.
The ban on outside food and drinks has caused the greatest controversy as it has led to long lines at the handful of restaurants and stores on the Expo site and people have complained not only about the wait, but also the prices. (Being a monopoly, the on-site facilities are able to gouge, gouge, gouge.) What's more, even Prime Minister Junichiro Koizumi has trashed the quality of the food.
Responding to criticism, the expo organizers were forced to both explain and modify their position regarding outside food. The threat, as they explained it, is food poisoning. By bringing boxed lunches, families threaten a massive outbreak of food poisoning. The process, as your humble editor understands it, seems to go:
Step 1: People bring in boxed lunches.
Step 2: ?????
Step 3: People die.
The organizers have graciously allowed families to bring in food that they've cooked at home while still maintaining the ban on store bought food from the outside. (Apparently all store bought food is dangerous.)
Your humble editor has long maintained that, for all their vaunted effeciency, Japan Rail employees are not trained to handle people. This was illustrated in horrible fashion a few weeks ago after one of the worst rail crashes in Japanese history.
A commuter train in Amagasaki derailed and crashed into an apartment complex leaving 107 dead and over 470 people injured. It is suspected that the driver was speeding to make up for lost time after having overrun a platform at the last stop. The overrun put him over a minute and a half behind schedule. (NB: For those used to British Rail's and AMTRACK's “We'll bloody well get there when we bloody well get there schedule”, a minute and a half behind schedule is an eternity in Japan.)
The Japanese press, always one to follow the leader, were setting the stage for a “reckless driver” story until it was revealed that the train's conductor had admitted to lying about the length of the overrun at the previous station and thus the length of the delay. He agreed he had done this in collusion with the driver. Also, the suspected speed kept going up. (For the record, JR West has now admitted the driver was doing about 68 miles an hour around a corner with a limit of 44 mph. This caused the front car to tip left, clip a power pole, and slide into the car park of the apartment building.) This all forced the press to take a closer look at JR West and there then ensued a series of damaging disclosures about JR's corporate culture and about its behavior after the accident.
First it was revealed that, not only were drivers taught how to make up lost time by speeding, but that JR West punished employees who caused too many delays by forcing them to do menial jobs such as janitorial work and gardening. The driver himself had undergone the “retraining program” the previous year and many in the public began to feel that he may have been under pressure to be on time. Many people also wondered why the 70 kilometer per hour speed zone didn't have one of Japan's high tech auto-breaks to slow the train down. It was revealed that JR West hadn't gotten around to replacing the old one, which only gives a warning, with a new one capable of slowing the train automatically.
This sent the survivors and the families of the dead into an angry tizzy and prompted angry quotes from the Prime Minister and a few members of Parliament. It was then learned that two JR West drivers on their way to work had been on the train when it crashed and, rather than helping, they called their head office for instructions. The head office instructed them to report to work.
As if that were not bad enough, it was then revealed that 40-some JR West workers, many of whom had not yet been notified about the accident, went to a company bowling tournament a few hours after the accident with many of them continuing on to a series of increasingly drunken after-parties. A seperate group of workers went to a golf tournament and still others went on trips outside of Japan.
The best JR West could do at this point was to assign a man to stand near the tracks and receive abuse from the families. The man, who acted suspicously like a station employee dealing with a crisis, was not assigned to answer questions, only to bow and apologize. This prompted the father of one victim to shout “I wish they'd say something instead of just bobbing their heads.”
The men with boxes and white gloves have already raided JRWest's offices and there are calls for the resignation of JR West's president.
Japan Airlines (JAL) has experienced a six month long chain of accidents and foul ups that's enough to keep people from flying anywhere on anything.
The accidents and foul ups involved little things such as:
--An aircraft taking off on a runway while a plane that had just landed was still on the runway.
--Cabin attendants forgetting to arm the emergency slides on the doors.
--A plane landing with parts missing from the rudder.
--Bouncing the tail of a jumbo-jet off the runway during a landing.
JAL has, of course, apologized profusely and promises to look into the issue.
Large groups of Chinese joined together last month to protest Japan's controversial new history white-washing textbooks (which long term sufferers will remember from past issues) by destroying Japanese business signs and throwing objects at the Japanese embassy and its various consulates. The protests stunned both Japan and the government of China which usually likes to put its stamp of approval on all protests. The Chinese government, which stood by during the first wave of protests, was particularly miffed when the protestors organized a second protest despite orders not to do so. Chinese authorities are now publicly rounding up the ring leaders of the protests to encourage others to obey the party line. Your humble editor pondered a longer article about this, but the notion of the Chinese government protesting the white-washing of history is so absurd as to be self-parodying.
The Charles Jenkins saga finally reached closure when Jenkins turned himself in to Army authorities and later confessed to both desertion and English teaching. (Your humble editor is particularly fond of that last charge although it should be pointed out the exact charge was aiding and abetting the enemy by teaching English to spies.) Jenkins was dishonorably discharged, lost his pension and served a good portion of his 30-day sentence before being released to retire to Sado Island—Japan's tradition island of exile—to live out his years with his wife and daughters.
Tae Satoya, a Japanese Freestyle Mogul Skier who won a gold medal in the Nagano Olympics and a bronze in Salt Lake, recently started a bar brawl that ended with her being carted off by police. According to the bar staff, Satoya and a foreign male companion were stripping off their clothes and getting ready to make “the beast with two backs” when a bar employee, being apparently opposed to such spectacles, tried to stop them. Satoya responded by throwing things, overturning tables and wrestling with the police. Another person on the scene said that, while the couple were getting hot and heavy, they were still fully clothed. He says the bar employee overreacted and was abusive himself and that the bar's version of events is to cover up what really happened. (The bar owner has refused all interviews.) Either way, your humble editor wants to party with Tae Satoya.