Japan Post Group Announces Leaders’ Resignations

December 29, 2019

Tokyo- Japan Post Holdings Co. on Friday announced the resignations of the chief executive officers of three group companies after the group received administrative punishments for improper sales of "Kampo" insurance products.

Masatsugu Nagato, Japan Post Holdings' president and CEO, will resign on Jan. 5. The following day, former internal affairs minister Hiroya Masuda will take over.

"We deeply apologize" for the scandal, Nagato told a press conference, attributing it to "my lack of management capabilities."

"I take my responsibility for the consequences," he added.

The Japan Post group will cut remuneration for executives at the three companies by up to 40 pct for six months from January.

Earlier on Friday, the Financial Services Agency ordered Japan Post Insurance Co. <7181> and Japan Post Co., both units of Japan Post Holdings, to suspend part of their operations for three months through March 2020. The agency also issued a business improvement order to the two units and the parent.

The internal affairs ministry also issued a business improvement order to Japan Post Holdings and Japan Post Co. The ministry's action also included a business suspension order to Japan Post Co.

"It is a serious problem, and drastic improvement is needed," internal affairs minister Sanae Takaichi told a press conference.

Financial Services Minister Taro Aso told a separate press conference that the Japan Post group failed to share necessary information internally.

Along with Nagato, Japan Post Insurance President and CEO Mitsuhiko Uehira and Kunio Yokoyama, Japan Post Co.'s president and CEO, will resign.

The FSA issued a business suspension order to Japan Post Insurance and Japan Post Co. for the first time.

Subject to the FSA order are operations for sales of Kampo insurance products. The group's mail and savings operations will not be affected.

The agency said it hopes to make the two Japan Post Holdings units focus on work to confirm details of their sales irregularities and establish preventive measures. The agency also severely criticized the parent company for group governance flaws.

At Japan Post Insurance, Deputy President Tetsuya Senda will succeed Uehira, while Kazuhide Kinugawa, senior managing executive officer at Japan Post Holdings, is set to replace Yokoyama at Japan Post Co.

Also, Yasuo Suzuki, Japan Post Holdings' senior executive vice president, will resign after being criticized for receiving information on the ministry's discussions on the administrative punishments from the then vice minister before the announcement. Suzuki himself used to be vice minister at the ministry.

Sales irregularities violating laws or internal rules are likely to have affected about 13,000 insurance contracts, according to a report by a committee set up by the Japan Post group to investigate the issue. Jiji Press