Press Conference by Yuji Yamamoto, Minister for Financial Services

(Excerpt)

July 10, 2007

[Minister's Statement]

I would like to report on the Cabinet meeting. The Chief Cabinet Secretary made remarks on changes in the basic plan for measures based on the Act Concerning the Special Measures on Humanitarian and Reconstruction Assistance in Iraq. The Minister for Foreign Affairs also made remarks on changes to the basic plan, and the Minister of Defense made similar remarks. Mr. Amari, Minister of Economy, Trade and Industry, reported on a white paper on international economy and trade for 2007. Minister Amari also reported on his tour of India and Australia. At a ministerial conference after the official Cabinet meeting, the Minister of the Environment made remarks on a campaign for a daily per capita reduction of 1 kilogram in carbon dioxide emissions. He stated that the campaign was launched for companies to give merits to customers carrying cards declaring their commitment to the aforementioned reduction. Financial institutions may be participating in the campaign. That concludes my statement.

[Questions and Answers]

Q.

I would like to inquire about yesterday's Tokyo High Court ruling that identified Steel Partners, which has made a hostile takeover bid for Bull-Dog Sauce Co., as an abusive acquirer, and made a decision regarding the implementation of an anti-takeover defense measure. This allowed Bull-Dog Sauce to become the first Japanese company to implement such a measure. Minister, what are your views on this case?

A.

I am aware that the Tokyo High Court turned down an appeal by Steel Partners on July 9. The Financial Services Agency would like to refrain from making any comments on this specific case. Stock prices are based on various market factors. Stock investment decisions are made by individual investors. Since it is difficult to identify any factors behind stock price changes, I would like to refrain from making any comments. Generally speaking, media reports indicate that an advantageous development for a Japanese company emerged as shareholders at their general meeting reached a decision on an M&A deal and on their benefits. I think this may be true. This has been a special case in which a specific plan for an anti-takeover defense measure has been given. Generally speaking, recent market developments have reaffirmed the principle that publicly traded companies are destined to deal with shareholders and their actions including open tender offers, irrespective of whether they would like to do so or not. There exist actions known as greenmail, which are all incorporated into the market and should be resolved in the market context. The market is now ending the initial stage. In the second stage set to come in future, we may have to consider the characteristics of a desirable stock market in the global economy. I believe that company experts in charge of anti-takeover defenses and lawyers engaged in relevant consulting services will have made great progress in collection of information and research into defense measures. Companies will have gradually come to understand and have obtained offensive and defensive measures in response to globalization. I expect to see encouraging market developments. I hope that both takeover bidders and targets will make further efforts in this direction.

Q.

You described this Steel Partners case as an individual case. However, the court decision is expected by some people to lead foreign funds to withdraw from the Japanese market after their active investment in Japanese companies. Could you share with us your view on the impact of the court decision on financial administration?

A.

A foreign fund's defeat in a specific case would never lead all participants to shy away from the market. This is one element of the market. At the next stage, market globalization may make further progress. When considering recent developments in London, New York and Singapore, I believe that we are dealing with games of wits. Since wits can be developed in a limitless fashion, I believe that both takeover and anti-takeover measures may - and must be - further developed.

Q.

Please permit me to ask about the problem of Minister Akagi's office expenditures. Do you think Minister Akagi's explanation of the matter has been sufficient?

A.

I have yet to hear details of the minister's explanations. Given that news reports have remained critical of Minister Akagi, I hope that he will provide a more reasonable explanation at today's press conference after the Cabinet meeting.

Q.

May I interpret your remark as indicating that you think his past explanations have been insufficient?

A.

I have not heard the details of his explanations and as such cannot comment on whether his explanations have been sufficient or not. Today, at about this time, I heard he would give a sufficient explanation at his press conference following the Cabinet meeting. After hearing his explanations, I would like to provide an answer, if possible.

Q.

Minister Akagi has used his family house as an office for his political organization and recorded huge office expenditures. What do you think of this practice?

A.

The problem is that the political fund control act requires politicians to make reports on revenues and expenditures, but does not require them to investigate into the realities or reasonability of such reports. I don't know how Minister Akagi has viewed this point in his reporting of political revenues and expenditures. I would like to make my point after hearing his remarks at today's press conference.

(End)