Press Conference by the Minister for Financial Services

(Excerpt)

October 7 , 2005

Q.

Yesterday, the Japanese Bankers Association announced its cash card agreement model concerning the counterfeit cash card problem. Please give us your comments on it.

A.

I am indeed aware that such an agreement model was announced yesterday; I now expect banks to promptly proceed with the work of revising their agreement clauses in a fashion that is in line with the model and to serve their customers sincerely in accordance with the purposes of law.

Q.

Given the current debates on certified public accountant engagements, in which some supposedly argue that the term of auditors should be changed from seven years to five years or the auditee should switch to another auditing firm, please tell us how you see the issue from the perspective of public administration, or your view on any possible change to the system.

A.

I understand that various debates are being conducted about the rotation rule issue or the idea of auditing firm switching, as you have just pointed out. There has been, however, no action on the part of public administration that led to the determination of policies on this subject in any form. In any event, we are hoping to work on enhancing and strengthening the certified public accountant audit system in consideration of any new facts that may be revealed in the future in the trial on the recent accounting cover-up case, as we carefully follow its progress. And to take resolute actions so as to improve the reliability of disclosure.

Q.

How do you see the recent attempt made by the Murakami Fund towards the acquisition of Hanshin Electric Railway shares?

A.

Seeing that it is a specific case, I am afraid that I would like to refrain from giving any comments on it, as I normally do with respect to any specific case.

Q.

Could you then speak generally about what you think of the discussion on the legality of the act of continuously purchasing in off-market transactions until the acquisition exceeded one-third of shares?

A.

I wish to refrain from giving any reply with respect to a specific case. Generally speaking, and strictly generally at that, though, the current TOB restriction applies to off-market transactions and therefore does not apply to market transactions. In the meantime, my current position is that there may be some room to interpret that the TOB restriction should apply to ownership of shares in excess of one-third in a combination of market and off-market purchases, depending on under what form the shares are acquired. As, in any event, I believe that the working group under the Financial System Council is in the process of discussing and will discuss in further detail what TOB procedures should be like, the Financial Services Agency is hoping to take appropriate actions as needed, based on the results of such deliberations.