U.S. investors will gain windfall profits from TSE-listed Shinsei Bank

Japanese Communist Party representative Shiokawa Tetsuya, at the House of Representatives Budget Committee meeting on February 16, criticized the planned listing of Shinsei Bank on the Tokyo Stock Exchange for causing a loss of 4 trillion yen in tax money.

Shinsei Bank, upon which 8 trillion yen in public funds have been used for its revival, will be listed at the TSE on February 19. U.S. investment firm Ripplewood holds 99 percent of the shares. By selling the listed stock, Ripplewood will gain in profit six times as much as it has invested.

Shiokawa also criticized the government for giving up the right of taxation on Ripplewood's capital gains. The revised Japan-U.S. Tax Treaty to be submitted to the current Diet session gives Japan the right of taxation, but the draft treaty has a special clause that the treaty will not be applied before it comes into effect, thus intentionally exempting Shinsei Bank taxation.

Finance Minister Tanigaki Sadakazu insisted on not taxing Ripplewood saying, "The government cannot force any unexpected disadvantage on the firm."

Reminding lawmakers that if Ripplewood pays the full tax amount, 140 billion yen will go to the national treasury, Shiokawa demanded that this revenue be used to assist small-and medium-sized businesses and Japan's economy. (end)