* * * * * * * * * T E R R I E 'S T A K E * * * * * * *<br>A weekly roundup of news & information from Terrie Lloyd.<br>(<a href="http://www.terrie.com">http://www.terrie.com</a>)<br><br>General Edition Sunday, October 23, 2011, Issue No. 635<br>
<br>+++ INDEX<br><br>- What's New -- Roller Coaster of Olympus Meltdown<br>- News -- Suntory to buy out Evian & Volvic?<br>- Candidate Roundup/Vacancies<br>- Upcoming Events<br>- Corrections/Feedback -- Right wingers with too much time<br>
on their hands<br>- News Credits<br><br>SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:<br><a href="http://mailman.japaninc.com/mailman/listinfo/terrie">http://mailman.japaninc.com/mailman/listinfo/terrie</a><br><br>
BACK ISSUES<br><a href="http://www.japaninc.com/terries_take">http://www.japaninc.com/terries_take</a>, or,<br><a href="http://mailman.japaninc.com/pipermail/terrie/">http://mailman.japaninc.com/pipermail/terrie/</a><br><br>
<br>-------------- PBXL SUPPORTS SMALL BUSINESS ---------------<br><br>MOVING TO A NEW OFFICE? DON'T BUY A PBX! At PBXL, we <br>understand how expensive and time consuming it is to move <br>into a new office, and we want to make sure that new <br>
businesses start off right. PBXL provides Cisco based <br>scalable, high quality telephony and communications <br>solutions.<br><br>- Data center hosted, fully managed telephony solutions<br>- Flexible to your business needs from 2 to 200 people<br>
- Avoid costly upfront purchases - Add phones as you grow<br><br>Check out our website today at <a href="http://pbxl.jp">http://pbxl.jp</a><br>e-mail us at <a href="mailto:info@pbxl.jp">info@pbxl.jp</a> or call us at 03-4550-2557<br>
<br>------------- PBXL is BUSINESS COMMUNICATIONS -------------<br><br>+++ WHAT'S NEW<br><br>An amazing story is unfolding before us here in Japan <br>involving over a billion dollars of potential fraud. At the<br>heart of the scandal is an autocratic Chairman, who may or <br>
may not have bilked investors in his public company of that<br>huge sum. The company we're referring to is Olympus, and <br>the ruler of that fiefdom is Tsuyoshi Kikukawa.<br><br>The way the events have unfolded, well you couldn't write a<br>
better fiction novel.<br><br>Olympus was founded in 1919 and early on in its existence <br>decided that microscopes and scientific optical gear would <br>be its domain. It's had a number of corporate captains <br>since the passing of the founders and the current one is <br>
Chairman Kikukawa. He is a product of Japan's golden age, <br>entering Olympus straight out of law school in 1964 and <br>rising gradually through the ranks until he was running the <br>show in 1998. Around him are similar directors and <br>
managers, all of whom are loyal and eager to please, and <br>like their boss they have mostly risen up through the <br>ranks by being generalists and playing the corporate <br>game well.<br><br>[Continued below...]<br><br>
-- NAGAMINE & MISHIMA - Securing Your Success in Japan ---<br><br>Starting a new company in Japan? Looking to streamline <br>your current operations?<br><br>The team of bilingual experts at Nagamine & Mishima is able<br>
to provide high quality accounting, payroll and tax <br>services that both exceed expectations and fit your budget.<br>Our services help customers improve their operations and <br>bottom line results. <br><br>To find out more about our services and how we can help <br>
your business in Japan succeed, please visit our website <br><a href="http://www.nagamine-mishima.com">www.nagamine-mishima.com</a> or reach us directly by telephone<br>at 03-3581-1975 or by email at <a href="mailto:info@nagamine-mishima.com">info@nagamine-mishima.com</a>.<br>
<br>---------- YOUR BOTTOM LINE IS OUR TOP PRIORITY------------<br><br>[...Article continues]<br><br>In 2006, Kikukawa realized that the Japanese domestic <br>market was grinding to a halt, dragged down by politics and<br>
a declining economy, so he contacted an acquaintance named <br>Hajime 'Jim' Sagawa, an ex-Nomura banker living in New York<br>since 1980, to start looking for foreign acquisitions. <br>Sagawa apparently quickly identified Britain's Gyrus as a <br>
takeover target and Olympus bought the company in 2008 for <br>the impressive sum of US$2.2bn. Sagawa appears to have had <br>two companies involved in taking commissions from the Gyrus <br>deal, one, AXES in New York, which received a modest fee <br>
income of US$7m, and the other AXAM, which eventually <br>received US$620m and was based in the Cayman Islands, well <br>outside the reach of the U.S. taxman. AXAM was <br>de-registered shortly after the transactions were <br>
completed. How convenient.<br><br>After acquiring Gyrus, a major company in its own right, <br>Kikukawa got to see how a top-rank western company is run <br>and no doubt realized that the future lay in competitive <br>practices that relied less on corporate politics and more <br>
on information, cost-control processes, and IT. To make <br>sure that the acquisition went well, he offered a rising <br>star in the Olympus Europe business, Michael Woodford, a <br>senior position in Japan. Woodford quickly settled into the<br>
new position, and within 6 months, Kikukawa had kicked <br>himself upstairs (to Chairman) and installed Woodford as <br>CEO. <br><br>What Kikukawa hadn't counted on, however, was the fact that<br>he was hiring a tiger into his team of Tokyo-based donkeys <br>
-- hard-working donkeys, yes, but in the end men who would <br>say yes when required to. Woodford, though, was the product<br>of a cut-throat corporate culture in Europe, and upon <br>landing the top job at Olympus Head Office apparently <br>
started setting about making sure that his position was <br>secure from outside (or inside) attack. From what Woodford <br>says, it very quickly became clear to him that not only was<br>there a lack of competency in the senior management on the <br>
board, but that some troubling financial transactions had <br>occurred as well.<br><br>He started digging, bringing in PwC to audit the <br>transactions, and what he found shocked him enough that he <br>must have realized he was sitting on a powder keg and had <br>
better cover his back. Survivor that he is, he moved <br>quickly and confronted Kikukawa and the Olympus board with <br>the evidence. It was a personal broadside they couldn't <br>handle, perhaps because they were involved in the fraud or <br>
perhaps because they realized they would be cast as being <br>incredibly incompetent. Either way, Woodford's evidence <br>would cost them their jobs. So they moved first and <br>unanimously fired Woodford for "not understanding the <br>
necessity of drawing on the corporate and Japanese culture <br>in running the business."<br><br>But you don't want to corner a tiger, and what they didn't <br>know is that Woodford had plenty of resources to fight <br>
back, including the smartest move of all -- he went to the <br>Serious Fraud Office in the UK, since the Gyrus acquisition<br>happened there, and provided evidence of suspicious <br>payments between Olympus and the advisors of the Gyrus <br>
deal. We're not talking about the typical 1%-2% fees that <br>most brokers would receive on a US$2.2bn transaction, but <br>instead a whopping 30% -- which Reuters has since reported <br>is the largest M&A fee ever made anywhere! As a point of <br>
contrast, the largest fee paid up until then was a US$217m <br>commission paid by RFS Holdings (Royal Bank of Scotland)<br>for a EUR70bn takeover of ABN AMRO in 2007. Puts things <br>into perspective doesn't it?<br><br>
Woodford also found out about 3 other unusual and hugely <br>expensive transactions here in Japan as well, which we <br>believe pretty much prove that Kikukawa and co. were up to <br>something shady. PwC found out that Olympus had paid about <br>
JPY80bn (at that time around US$773m) for 3 tiny, privately<br>held companies in Japan, which between them weren't making <br>more than JPY3bn in revenues and which were in areas <br>totally unrelated to the Olympus core business. Just the <br>
year after the three deals were done, Olympus quietly wrote<br>down the purchases by more than 70%, or around US$586m in <br>impairment losses. <br><br>It is unbelievable that the management of such a major public<br>company would make such terrible purchasing decisions <br>
repeatedly and allow themselves to lose such a huge amount <br>of company money. One mistake could be considered <br>incompetence, but four times running implies something much<br>more suspicious and deliberate. No one knows at this stage <br>
whether Kikukawa was the beneficiary of these deals or not,<br>but as the old saying goes, "follow the money". Now that <br>the British SFO is on the case, the Japanese financial <br>authorities really have no choice but to take up the matter<br>
and we think this will most likely wind up with Kikukawa at<br>least being charged with negligence and being deposed from <br>the company. <br><br>What is most disturbing is that if there wasn't a foreign <br>transaction, and if no foreigners had been involved in the <br>
deal, then the Olympus scandal probably would have never <br>seen the light of day. Kikukawa "owns" the Olympus board, <br>with only 3 outside directors, and at least one of them a <br>personal friend, it is unlikely that they would have <br>
challenged the Big Boss over the losses. Indeed, they never<br>did challenge him in the 3 years following Gyrus and the <br>other losses.<br><br>In the longer term, this episode also means that hiring a <br>senior foreigner into a major Japanese company can spell <br>
big trouble for existing management. Transgressions can no<br>longer be kept in the family when there are prying outsiders <br>looking at the books, and so the potential for things to blow<br>up increases dramatically. We believe that Japanese firms <br>
who might have been thinking to promote foreigners up <br>through the ranks will be watching the Olympus scandal <br>with trepidation and will be pulling back from any hiring plans <br>they may have had. <br><br>The reader who commented in TT-634 last week about a <br>
certain major Japanese investment bank that has similar <br>"sacred cows" and entrenched management cliques, has turned<br>out to be very prescient. <br><br>...The information janitors/<br><br>***------------------------****-------------------------***<br>
<br><br><br>--------- BIOS - Bilingual IT Systems and Support ---------<br><br>BiOS full-service IT solutions has a new service.<br><br>Now the largest independently owned bilingual IT support<br>company in Tokyo, BiOS offers some of the most competitive<br>
services available to multinationals whether large or<br>small.<br><br>Data Center staff and managed services, Help Desk, desktop,<br>and network support. Server virtualization, cloud computing<br>hosting and solutions, general software development. <br>
<br>For more information on these and other SI and IT services,<br>in English or Japanese:<br><br>Phone: (03) 4588-2220, Email: <a href="mailto:solutions@biosjp.com">solutions@biosjp.com</a><br>Web: <a href="http://www.biosjp.com">www.biosjp.com</a><br>
-----------------------------------------------------------<br><br>+++ NEWS<br><br>- KDDI going international?<br>- Tepco to sell portion of Eurus to Toyota<br>- Suntory to buy out Evian & Volvic?<br>- Odiferous gas yields oncology clues<br>
- Japan surpasses France for 3-star restaurants<br><br><br><br>-> KDDI going international?<br><br>An innocuous acquisition by KDDI may indicate that the firm<br>is finding a way into the international markets, without <br>
having to do a massive M&A like NTT Comms did with Verio <br>years ago (much to NTT's subsequent regret). KDDI is buying<br>out for JPY12.8bn 85.5% of Korean company CDNetworks. <br>CDNetworks technology speeds up the delivery of content to<br>
mobile users in 31 countries around the world -- from what <br>we can tell, a sort of "Akamai" for the cell phone world. <br>***Ed: This seems like a great niche business to be in, and<br>one that is sufficiently upstream that it will be somewhat <br>
impervious to user vagaries.** (Source: TT commentary from <br><a href="http://businesswire.com">businesswire.com</a>, Oct 13, 2011)<br><br><a href="http://bit.ly/o5YDEo">http://bit.ly/o5YDEo</a><br><br>-> Tepco to sell portion of Eurus to Toyota<br>
<br>Well, it looks like the "Great Tokyo Electric Power Co. <br>(TEPCO) Asset Sell-off", to partly cover the costs of its <br>nuclear victim compensation pay-outs, has started. Although<br>somewhat modest, TEPCO is said by Nikkei to be selling a <br>
20% stake in wind power producer Eurus Energy to Toyota <br>Tsusho (who already owns 40%) for JPY20bn. ***Ed: TEPCO has<br>plenty more assets to sell, and we're surprised, actually, <br>that they are only selling 20% of Eurus to Toyota. A true <br>
commitment to making good on the victim damages done so far<br>should have been much more. We wouldn't be surprised if <br>they draw more flak for this point.** (Source: TT <br>commentary from <a href="http://e.nikkei.com">e.nikkei.com</a>, Oct 22, 2011)<br>
<br><a href="http://e.nikkei.com/e/ac/tnks/Nni20111022D22JFF01.htm">http://e.nikkei.com/e/ac/tnks/Nni20111022D22JFF01.htm</a><br><br>-> Suntory to buy out Evian & Volvic?<br><br>Just why they are doing it, we're not sure, but Danone of <br>
France has apparently asked Suntory if the Japanese firm <br>would like to buy out its mineral water business, starting <br>with Evian and Volvic in Asia. The Nikkei is saying that <br>the asking price is around JPY500bn for a business that has <br>
sales of around EUR2.87bn (JPY300bn). ***Ed: What we don't <br>understand is that Danone's water business rose 5.3% last <br>year and is expected to continue growing strongly in <br>emerging economies such as Indonesia, where they have top <br>
market share. We can only imagine that either they are <br>having problems elsewhere in the business and need the <br>cash, or that they don't see a lot more growth due to <br>competition. Either way, this can't be wonderful news for <br>
Suntory -- although we are sure they will still jump at <br>the chance of buying such prestigious brands.** (Source:<br>TT commentary from <a href="http://e.nikkei.com">e.nikkei.com</a>, Oct 21, 2011)<br><br><a href="http://e.nikkei.com/e/ac/tnks/Nni20111021D21EE887.htm">http://e.nikkei.com/e/ac/tnks/Nni20111021D21EE887.htm</a><br>
<br>-> Odiferous gas yields oncology clues<br><br>Believe it or not, researchers at Nagoya University have <br>created a method of testing wind passed by patients to <br>assess their likelihood of having colorectal cancer. No <br>
laughing matter, especially when the current alternative is<br>a colonoscopy (ouch!), the scientists have found that <br>colorectal cancer patients have a higher measure of methyl <br>mercaptan, a sulfur compound produced by later stage <br>
cancers. The gas samples are collected in special bags that<br>absorb the methyl mercaptan, and which are then are tested<br>with a sophisticated machine at Hiroshima University. <br>(Source: TT commentary from <a href="http://japantimes.co.jp">japantimes.co.jp</a>, Oct 22, <br>
2011)<br><br><a href="http://www.japantimes.co.jp/text/nn20111022a2.html">http://www.japantimes.co.jp/text/nn20111022a2.html</a><br><br>-> Japan surpasses France for 3-star restaurants<br><br>Not sure how the French feel about it, or if they even <br>
care given the current Euro turmoil, but nonetheless it <br>is a sign of the times that Japan now officially has more <br>3-star Michelin Guide restaurants than does France. The <br>tally is 29 in Japan versus 25 in France. Tokyo came in <br>
first with 14 3-star establishments, then Kyoto with 7, <br>Osaka with 5, and Kobe and Nara with the other 3. There <br>apparently has been a lot of controversy over the new 2012 <br>rankings, which include a Korean-food restaurant called <br>
Houba in Osaka. (Source: TT commentary from <br><br><a href="http://tgr.ph/q3djrw">http://tgr.ph/q3djrw</a><br><br><br>NOTE: Broken links<br>Many online news sources remove their articles after just a<br>few days of posting them, thus breaking our links -- we<br>
apologize for the inconvenience.<br><br>***------------------------****-------------------------***<br><br>+++ CANDIDATE ROUND UP/VACANCIES<br><br>=> BiOS, a Division of the LINC Media group, is actively<br>marketing the following positions for customers setting up<br>
or expanding in Japan, as well as other employers of<br>bilinguals.<br><br>** HIGHLIGHTED POSITION<br><br>BiOS is urgently looking for a Service Delivery Manager <br>with experience providing business-side management of data <br>
center operations at our client’s office in the Chuou-ku <br>area. The candidate will be responsible for directly <br>negotiating with multinational clients when providing <br>technical support and facility management of the data <br>
center services. The candidate will also coordinate with <br>internal departments regarding schedules and scopes of <br>available resources to provide to the clients.<br><br>You will also be responsible for managing official <br>
documents including legal contracts such as: SLA, SOW, <br>NDA, etc., by coordinating with the sales, legal, and IT <br>departments.<br><br>Due to the technical nature and demanding work environment,<br>this position is suitable for someone with solid experience<br>
managing or delivering data center services. In addition, <br>since this role requires direct negotiations with both <br>Japanese and international clients, business-level <br>communication skills in English and fluent Japanese will be<br>
required.<br><br>Remuneration is JPY9m – JPY11m depending on your experience<br>and skill level.<br><br>** POSITIONS VACANT<br><br>- Data Center Engr (Osaka), global bank, JPY3.5M – JPY 4.5M<br>- Editor in Chief, publishing co, JPY4M – JPY5M<br>
- Bilingual Desktop Engr, global telecomms, JPY4M – JPY4.5M<br>- Sales Executive, global SI co, JPY8M – JPY11M<br>- Project manager (VoIP), global SI co, JPY7M – JPY8.5M<br><br>Interested individuals may e-mail resumes to:<br>
<a href="mailto:tomohiro.kimura@biosjp.com">tomohiro.kimura@biosjp.com</a><br><br>** BiOS Job Mail<br><br>Every 2 weeks BiOS sends out a regular communication to its<br>job seeking candidates, called BiOS Job Mail. Every edition<br>
carries a list of BiOS's current and most up-to-date<br>vacancies, with each entry featuring a short job<br>description and a direct link to the main entry on the BiOS<br>home page. Regardless of whether you are unemployed and<br>
searching, thinking about a career change, or just curious<br>to know if there is something out there that might suit you<br>better, the BiOS Job Mail newsletter is an easy and<br>convenient way for you to stay informed. If you would like<br>
to register for the BiOS Job Mail, or to find out more,<br>please email <a href="mailto:kenji.sakota@biosjp.com">kenji.sakota@biosjp.com</a>.<br><br>Interested individuals may e-mail resumes to:<br><a href="mailto:tomohiro.kimura@biosjp.com">tomohiro.kimura@biosjp.com</a><br>
<br>-----------------------------------------------------------<br><br>***------------------------****-------------------------***<br><br>+++ UPCOMING EVENTS/ANNOUNCEMENTS<br><br>--------- Official Apache Solr training in English --------<br>
<br>For engineers in Japan! (October 25-27, 2011)<br><br>Train in Tokyo to become an expert Apache Solr engineer <br>with a course developed by the engineers who helped write <br>the Apache Lucene/Solr code. This intensive, three-day, <br>
hands-on, classroom course will be delivered in English by <br>certified instructors on Oct. 25-27, 2011 in Tokyo.<br><br>"Developing Search Applications With Solr" covers designing<br>Solr applications, indexing, findability, Japanese search <br>
support, faceted navigation, admin configurations, etc.<br><br>Training Info: <a href="http://www.lucidimagination.jp/training-en/">http://www.lucidimagination.jp/training-en/</a><br><br>Registration: <a href="http://bit.ly/oNarEZ">http://bit.ly/oNarEZ</a><br>
-----------------------------------------------------------<br><br>----------------- ICA Event - October 26 ------------------<br><br>Speakers: Various from Apple Japan<br>Title: Apple in Business<br><br>Details: Complete event details at <a href="http://www.icajapan.jp/">http://www.icajapan.jp/</a><br>
(RSVP Required)<br><br>Date: Wednesday, October 26, 2011<br>Time: 8:00am Doors open, Coffee and Light snacks provided<br>Cost: Free, open to all<br>Venue is Apple Store Shibuya<br><br><a href="http://www.apple.com/jp/retail/shibuya/map/">http://www.apple.com/jp/retail/shibuya/map/</a><br>
-----------------------------------------------------------<br><br>---------------- Start a Company in Japan -----------------<br><br>Entrepreneur's Handbook Seminar 3rd of December, 2011<br><br>If you have been considering setting up your own company,<br>
find out what it takes to make it successful. Terrie Lloyd,<br>founder of over 17 start-up companies in Japan, will be <br>giving an English-language seminar and Q and A on starting <br>up a company in Japan.<br><br>This is an ideal opportunity to find out what is involved,<br>
and to ask specific questions that are not normally <br>answered in business books. All materials are in English <br>and are Japan-focused.<br><br>For more details:<br><a href="http://www.japaninc.com/entrepreneur_handbook_seminar">http://www.japaninc.com/entrepreneur_handbook_seminar</a><br>
-----------------------------------------------------------<br><br>***------------------------****-------------------------***<br><br>+++ CORRECTIONS/FEEDBACK<br><br>In this section we run comments and corrections submitted<br>
by readers. We encourage you to spot our mistakes and<br>amplify our points, by email, to <a href="mailto:editors@terrie.com">editors@terrie.com</a>.<br><br>*** We often get general reader comments, and here is a <br>good one expressing surprise that the right wingers still<br>
have a quorum when it comes to anti-Korean protests.<br><br>=> Reader says: A few weeks ago in one of your Terrie's <br>Take's you commented on Korea phobia by some parts of the <br>community. Not so long ago I went to Odaiba for a few <br>
hours with my family, and when I arrived at Daiba Station <br>around noon, there was one of those uyoku trucks parked <br>across the street from Fuji TV (in front of Aqua City or <br>thereabouts), and a number of people scattered about the <br>
area holding Japanese flags in the air. By sometime after <br>2 pm, I was at the other end of the block coming out of <br>the Joypolis side when we came upon a group of several <br>hundred protesters in an organized march. There were <br>
police all around them and manning other parts of the <br>street as well. A number of pedestrians stopped for a photo<br>opportunity...I didn't bother, but it was quite a <br>spectacle.<br><br>Thought you might be interested to know this is still <br>
going on. I was a bit surprised myself about the longevity<br>of it all. Rather than worry about it though, the only <br>thought that crossed my mind was "Yoppodo hima da ne...!"<br>It always amazes me that so many people have nothing better<br>
to do.<br><br>***********************************************************<br>END<br><br>SUBSCRIBERS: 8,363 members as of Oct 23, 2011<br>(We purge our list regularly.)<br><br>+++ ABOUT US<br><br>STAFF<br>Written by: Terrie Lloyd (<a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>)<br>
<br>HELP: E-mail <a href="mailto:Terrie-request@mailman.japaninc.com">Terrie-request@mailman.japaninc.com</a><br>with the word 'help' in the subject or body (don't include<br>the quotes), and you will get back a message with<br>
instructions.<br><br>FEEDBACK<br>Send letters (Feedback, Inquiries & Information) to the<br>editor to <a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>.<br><br>ADVERTISING INFORMATION<br>For more information on advertising in this newsletter,<br>
Contact <a href="mailto:ads@japaninc.com">ads@japaninc.com</a>.<br><br>SUBSCRIBE<br>Get Terrie's Take by giving your name and email address at<br><a href="http://www.japaninc.com/newsletters/free_sign_up">http://www.japaninc.com/newsletters/free_sign_up</a>, or go<br>
straight to Mailman at:<br><a href="http://mailman.japaninc.com/mailman/listinfo/terrie">http://mailman.japaninc.com/mailman/listinfo/terrie</a><br><br>BACK ISSUES<br><a href="http://www.japaninc.com/terries_take">http://www.japaninc.com/terries_take</a><br>
or, <a href="http://mailman.japaninc.com/pipermail/terrie/">http://mailman.japaninc.com/pipermail/terrie/</a><br><br>Copyright 2011 Japan Inc. Communications Inc.<br><br>----------------- Japan Inc opens up Japan ----------------<br>
<br>J@pan Inc is Japan's only independently published English-<br>language business website. Authoritatively chronicling<br>online the business trends in Japan, each posting brings<br>you in-depth analysis of business, people and technology in<br>
the world's second largest economy.<br><br>Visit <a href="http://www.japaninc.com">www.japaninc.com</a> for the best business insight on<br>Japan available.<br>-----------------------------------------------------------<br>
<br><br>