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Provisional Translation

Press Conference by ASO Taro, Deputy Prime Minister, Minister of Finance, and Minister of State for Financial Services

(Excerpt)

(Tuesday, December 17, 2019, 10:55 am to 11:01 am)

[Opening remarks:]

Every year, dozens of companies make their initial public offering (IPO), or the first offering of shares of a private corporation in a new stock issuance. However, recently contracts cannot be concluded between auditors and companies trying to make their IPOs. I think perhaps it may be the influence of the Toshiba issue. Also, it takes a great deal of time and effort to deal with stocks to be newly listed, and there isn’t enough time to do so. There is also not enough manpower, as there are problems dealing with various tasks at listed companies. For those reasons, there hasn’t been much in the way of agreement. Even if auditors are asked, they can’t. It is an issue within the private sector, however, the FSA has been monitoring the situation, and has set up the “Liaison Meeting on the Audit Firms selection for Initial Public Offering (IPO) preparation,” and is holding its first assembly.

[Questions and answers:]

Q.

My question related to the Japan Post Insurance issue. There have been reports that an order for the partial suspension of business at Japan Post Insurance and Japan Post is being considered. I’d like to ask you about the facts related to this issue, and about how you want the Japan Post to respond to the series of problems.

A.

I am aware of the report. While we do not speak in detail about individual companies, it is the position of the FSA to tell companies that end users were disadvantaged due to this, and that they must receive an appropriate response. However, what is in the background of such a case is specific to the individual company, so it is not quite within the jurisdiction of the FSA. It could be considered a problem of compliance. Going forward, the third-party committee gets involved regarding the issue of whether or not the company is properly carrying out governance and controls. Tentative information on that matter will be released tomorrow on the 18th, and we plan to receive a report. In any case, the causes of the incident are currently being analyzed. We haven’t seen that information yet, so we do not have all the facts as of now. There are many cases. So many that rather than assuming that only some employees were involved, we could assume that the company as a whole was involved in a systemic manner. It’s the reality that such questions exist, but rather than guess, we will refrain from speaking further on the matter.

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