Japan’s Minister Returns Salary After Scandal

 Japan’s Finance Minister, Taro Aso said on June 4 he was returning a year’s salary after his ministry scrubbed public documents related to a cronyism scandal that has dogged Prime Minister Shinzo Abe. JIJI PRESS / AFP


Japan’s Finance Minister, Taro Aso, said Monday he was returning a year’s salary after his ministry scrubbed public documents related to a cronyism scandal that has dogged Prime Minister Shinzo Abe.

But he ruled out resigning after it emerged ministry officials had removed hundreds of references to Abe, his wife, and Aso from documents related to the sale of state land at below-market prices.

“I am voluntarily returning 12 months of my salary as a cabinet minister, as this problem has hurt public confidence in the finance ministry and the administration as a whole,” Taro Aso told reporters.

But he added, “I am not thinking about stepping down”, as he announced the findings of the ministry’s in-house probe.

Aso is the richest minister in Abe’s cabinet because of his family’s massive fortune made in the mining business. He also earns some 30 million yen ($274,000) a year as a cabinet minister.

Aso said the ministry had penalised around 20 officials, imposing pay cuts in some cases and issuing verbal reprimands to others.

“Officially approved administrative documents should never have been altered and submitted to parliament. I find this extremely regrettable,” he said.

Abe told reporters he wanted Aso to stay on to ensure lessons were learned from the scandal.

“We should conduct a thorough review of how to keep public documents and take measures to prevent a recurrence,” he said, adding that he wanted Aso “to take leadership in this and fulfil his responsibility.”

The scandal revolves around the 2016 cut-price sale of state-owned land to a nationalist school operator who claims ties to Abe and his wife Akie.

The penalised officials include Nobuhisa Sagawa, whose office helped alter key documents related to the controversial land sale. He has since resigned.

Giving sworn testimony in parliament soon after he quit the ministry in March, Sagawa denied any involvement by Abe or the prime minister’s office in falsifying the documents.

But the senior bureaucrat declined to answer detailed questioning about how and when documents were altered, saying he was under criminal investigation.

Prosecutors last week decided not to press charges against him.

Abe also faces a second cronyism scandal in which the opposition alleges he used his influence to help an old friend open a school in a special economic zone, bypassing cumbersome government regulations.

Abe, in power since late 2012, is in no imminent danger of losing his job, but the scandals have affected his popularity.

A new opinion poll released Monday showed voter support for his cabinet down 1.6 percentage points over the past month to 39 percent, the lowest level since he took office.

The finance ministry, considered the most powerful in Japan’s bureaucracy, has also been rocked by a sexual abuse scandal that forced the resignation of a senior official.


Toshiba CEO To Resign Over Accounting Scandal

Masashi-Muromachi-toshibaJapan’s Toshiba Corp said its Chief Executive was stepping down on Tuesday after an independent investigation said it had overstated its profits for the past six years.

The CEO and President, Hisao Tanaka would be replaced by Chairman, Masashi Muromachi, effective on Wednesday.

The company said in a statement that it was considering appointing outside directors to over half of its board seats.

On Monday, an independent panel appointed by Toshiba, said the firm had overstated its operating profit by a total of 151.8bn yen ($1.22bn, £780m).

The overstatement was roughly triple an initial Toshiba estimate.

Tanaka’s predecessors, Vice Chairman Norio Sasaki and adviser, Atsutoshi Nishida, would also step down after the third-party report showed they also played a part in the overstatement of profits going back to the 2008 financial year.

The inquiry found that the misreporting of profits began after the financial crash seven years ago, when senior managers began imposing unrealistic performance targets.

“Within Toshiba, there was a corporate culture in which one could not go against the wishes of superiors,” the report said.

“Therefore, when top management presented ‘challenges’, division presidents, line managers and employees below them continually carried out inappropriate accounting practices to meet targets in line with the wishes of their superiors.”

The findings are expected to lead to the restatement of earnings, a board overhaul and potentially hefty fines at the computers-to-nuclear conglomerate in Japan’s worst corporate scandal since Olympus Corp was found to have covered up $1.7 billion in losses in late 2011.

Japanese Finance Minister, Taro Aso said earlier on Tuesday that the accounting irregularities at Toshiba were “very regrettable”, coming at a time when Japan is trying to regain global investors’ confidence with better corporate governance.

“If (Japan) fails to implement appropriate corporate governance, it could lose the market’s trust”.

Aso declined to comment when asked if Toshiba would face any kind of financial penalty. Sources told Reuters that regulators were beginning their own review of Toshiba’s book-keeping, based on Monday’s report.

The investigation came just as Prime Minister, Shinzo Abe had implemented new guidelines to improve the country’s corporate governance.

Japan Gets New Finance Chief

Japans new Prime Minister Shinzo Abe on Wednesday named Taro Aso as the country’s sixth finance chief in three years.

The 72 year old will serve as both deputy Prime Minister and Financial Services Minister in the new administration.

Mr. Aso’s first task will be to deliver his party’s pledge of a “Large-scale” supplementary budget to stimulate the economy, which is forecast to shrink for a third straight quarter.

The incoming leadership team has championed both fiscal and monetary stimulus, along with a weaker exchange rate to end Japan’s deflation and restart growth.

Earlier on Thursday, Aso said a planned doubling of Japan’s sales tax to 10 percent by 2015 pushed through, early this year by the Ousted Democratic Party of Japan.

It may be put on hold unless Japan’s economy picks up.

Japan’s new premier has proposed the BoJ set a two-percent inflation target, and vowed big government spending to jumpstart growth although his prescription for solving Japan’s woes has been met with a mixed response from economists.