Capital of ShinGinko Tokyo bank to be reduced

Japan Press Weekly

Japan Press Service Co., Ltd. is the only news agency providing information of progressive, democratic movements in Japan

Capital of ShinGinko Tokyo bank to be reduced

Stockholders of ShinGinko Tokyo Bank held a general meeting on June 30 and decided to cut its capital by 85.5 percent, or 101.6 billion yen, to deal with the bank’s financial crisis.

Out of 100 billion yen the Tokyo Metropolitan Government invested in the bank, 85.45 billion yen, or 6,600 yen per a resident, will be wasted.

ShinGinko Tokyo was created under Governor Ishihara Shintaro’s policy initiative. It opened in April 2005 after his government decided to invest 100 billion yen for FY 2004. The Liberal Democratic, Democratic, and Komei parties, as well as Seikatusha Net supported the “initiative.”

Its accumulated deficit reached 101.6 billion yen as of March this year.

In a metropolitan assembly plenary session last March, Governor Ishihara proposed an additional capital injection of 40 billion yen into the bank.

The ruling Liberal Democratic and Komei parties used their force of majority to approve the proposal despite opposition by the Japanese Communist and Democratic parties as well as the Seikatsusha Net. The measure infuriated many Tokyo residents.

JCP Metropolitan Assembly member Sone Hajime pointed out that the bank’s huge loss was due to the sloppy business plan the Tokyo Metropolitan government imposed on the bank. He said, “Governor Ishihara is responsible for his top-down measure to invest 100 billion yen in the bank.”

“The on-going restructuring plan could bring another loss to ShinGinko Tokyo. The government should immediately withdraw from the bank in order to protect residents’ tax money,” said Sone. - Akahata, July 1, 2008