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Taxi revenue down 2.8% since rates hiked in Tokyo

In December, taxi fares shot up 7.2% in Tokyo and about the same amount in the immediate vicinity. The idea behind the higher rates was, of course, to generate more revenue, which the taxi companies said they hoped to pass along to drivers in the form of higher salaries. It looks like they won’t have to worry about lying to the drivers about not raising their salaries any time soon, since this morning we found out that Tokyo’s taxi operators reported a 2.8% fall in average daily operating revenue over the first month since the higher fares were introduced.

The Tokyo Taxi Association, who announced the figures on taxi revenue, announced that the number of trips taken over the same time frame was about 8.9% lower since the higher fares had come into play. This countered what happened in Nagoya and other places, where fare hikes in the last year led to higher revenues.

Of course, those fare hikes weren’t done when gasoline was 150 yen a liter. The Tokyo Taxi Association blames the fall in revenue on consumers using taxis less that before, which it seems they have done (the figures were year-on-year), but we hear nothing of the impact of higher gasoline prices. The Tokyo Taxi Association points out that when fares were raised a decade ago, it took Tokyo passengers about a year to get used to the higher rates.

Of course, we have to wonder if people are simply seeking out alternative forms of transportation because they’re cutting back on their own budgets…next month’s numbers will be worth watching.

2008 Tokyo Michelin Guide sold out already

This year’s easy Christmas gift is gone from the shelves, at least for now.

It seems that Michelin understands the pattern well: get ready to roll your product out in Japan, have the PR people place (or provoke) a few quotes in the media about how foreigners ‘don’t understand’ or ‘can’t understand’ some aspect of Japan to pique interest, and then hit the shelves with an under supply of product.

The 2008 Michelin Tokyo Guide has already sold out. It only took two days. The Krispy Kreme model, which still has people standing in line outside of a doughnut shop (now 2), seems to have been adjusted and put into play well here. The second printing should sell out like hotcakes as well.

The Nikkei also tells us that Hiramatsu, a restaurant group that had five of its restaurants awarded one star by the guide, is rushing to open more locations. Company President Hirotoshi Hiramatsu told the Nikkei, “Like Moody’s ratings for industry, these stars are a sign of excellence and directly influence the restaurant business.” No mention of quality management strategies during expansion is made in the article, probably for a good reason.

A quick look at Michelin’s Japanese website shows a nice first page, followed by some fairly rough looking design. I also couldn’t get the ‘concept movie’ to load.

If you’re interested in seeing which restaurants in Tokyo were ranked, there’s a list online at the Michelin site. That one shouldn’t sell out.

New Michelin guide names 8 3-star restaurants in Japan

Last week, French tire maker Michelin released the first-ever Tokyo edition of its restaurant guide. In all, the reviewers named 8 three star, 25 two star and 117 one star restaurants in Tokyo. This compares to 39 restaurants with at least one star in New York, and 64 in Paris.

Those reading the story would be forgiven for instantly understanding that market pandering that is going on; Michelin had to do something to stroke the ego of the home country in this case in order to actually move copies off the shelves. The trouble seems to be that professionals are actually fooled by this marketing tactic. The Asahi quotes Toyoo Tamamura, 62, an essayist well-versed in French food culture as saying, “The quality of Tokyo cuisine is higher than in Paris.”

We don’t know anything about Tanamura’s qualifications, but we wonder if she was part of the group that just a few weeks ago complained that that Michelin had no place doing a restaurant guide in Tokyo because there was no way their people could understand Japanese food.

On the other hand, is it possible that Tokyo cuisine is better than in Paris? I think so, but that’s a matter of personal taste. One thing’s for sure: I don’t need a guidebook to tell me that I cook my favorite food in the city.

Teaching for food? Why this PR stunt is a bad idea

I am completely at a loss trying to understand this Japan Times article concerning former Nova teachers conducting lessons in exchange for food.

Thus far, I have been very careful not to criticize the Nova union, or anyone else whom I think is honestly trying to help people who have found themselves in a bad position, but this boneheaded PR stunt deserves comment. Read more

Discount education simply does not work; neither does blind trust in food makers

I just read an editorial/article on Nova that struck me as so-so at best, but one quote really stands out, and tells the story in six simple words:

“Discount education simply does not work.”

Let’s see how that gets applied to the food industry in the coming weeks and months. From a different article on problems with safety in Japan’s food industry:

“I was always wary of Chinese products but now I feel I can’t trust anybody, especially after Arafuku.” - Tokyo housewife Naoko Shimoda

So…Snow Brand, Nippon Ham, Meat Hope, Fujiya, Ichiya, Shiroi Koibito, Hinaidori, and McDonalds Japan (which managed to keep its 2002 food scandal very quiet) didn’t bother you? It took problems at Akafuku to make you realize something is going on?

A sponsor for Nova? The Nikkei remains doubtful

Over the weekend, a few articles came out hinting that Nova’s bankruptcy administrators might be making some progress in finding a ’sponsor’ to guide the firm towards rehabilitation. The Japan Times reported on Sunday that twelve firms had stepped forward to apply for sponsorship of the firm.

The source? The bankruptcy administrators themselves. The interested parties? Well, they’re not named. Third party verification of the claim? There’s none.

The last time four firms were named as potential sponsors of Nova, three of them quickly stated that they were not interested, weren’t considering such a move, and had no idea of why their name even came up. The fourth, Yahoo Japan, didn’t even bother to comment publicly on the issue.

Of course, it’s not impossible that someone will step in and take over Nova’s operations, or some part of it. To tell the truth, I would be a tad surprised if someone didn’t have a go of it. The Nikkei would be less surprised than me. In a Monday article entitled Nova Having Tough Time Finding Sponsor; Breakup Possible, the Nikkei says that Nova’s bankruptcy administrators are having a ‘tough time’ finding a sponsor for the firm, and that any listed firms would be unlikely to come to the aid of a company where the assets are in such disarray.

How broke is Nova? Read more

And then there was one: Two more potential Nova buyers say no

We heard the names Marui, Aeon, Rakuten and Yahoo tossed around as potential buyers (or ’sponsors’) for Nova. Then Marui basically said they weren’t interested. Tonight, an article in the Asahi Shimbun tells us that Aeon and Rakuten are out as well. Actually, it turns out they were never in - or perhaps have ‘never been in’ since allegations of securities fraud arose this morning.

From Aeon President Okada: “当社のショッピングセンターにＮＯＶＡの教室が入居しているから名前が挙がった� けなのでは。まったく考えていない。”
“Our name came up because Nova has locations in some of our shopping centers. We’re not thinking about it at all.”

From Rakuten President Mikitani: “何で名前が挙がったのか、正直意外� 。検討するには難しいと思う。”
“Why did our name come up? It’s honestly surprising. I think it would be difficult for us to consider [supporting Nova].”

“Difficult” in this context usually means something along the lines of, “Umm…no.”

Will Yahoo even bother rejecting the offer?

Mainichi: Saruhashi dumped his Nova shares by September 30; Nishida: I arranged the Nova equity warrant sale; Saruhashi: I’ve never heard of Nishida

There has been some speculation going on as to how former Nova President Nozomu Saruhashi was reported to hold somewhere in the neighborhood of 20% of the firm’s shares by last Friday. As anyone following the Nova case knows, Saruhashi, along with holding company Nova Kikaku, was always assumed to be the majority holder of Nova’s shares.

He was. The Bloomberg box told us that Nova’s top shareholders were as follows:

1. Nova Kikaku 35.94%
2. Saruhashi, Nozomu 35.47%
3. Roots 11.82%
4. Saruhashi, Hikaru 3.83%
5. Saruhashi, Izumi 1.93%

We’re forced to wonder how and when Saruhashi cashed out, and whether or not it was legal. First of all, according to a notification from the Financial Services Agency in March, any transaction involving a purchase or sale of 5% of a listed firm must be reported on EdiNET (Electronic Disclosure for Investors’ NETwork).

Nova’s code at EditNET is 941240. As of this morning, no sale from Saruhashi has been reported.

So…when were the shares sold? According to today’s Mainichi:

It has emerged that the stake held by NOVA Kikaku and Sahashi had declined to 3.69 percent and 16.02 percent, respectively, by Sept. 30, totaling 19.71 percent. Neither Sahashi nor NOVA Kikaku has submitted a report on the sale of the shares.

Emphasis added. There’s not much of a point in even checking EditNET or Bloomberg. The sale was not reported within five days. According to the FSA’s document from March, failure to properly disclose any transaction involving greater than 5% of a listed firm is a violation of the Securities and Exchange Law.

Also according to the Mainichi: Arrested stock price manipulator Haruo Nishida told the paper on October 11 that he was involved with setting up the sale of Nova’s equity warrants, saying, “I helped set them up. I was just about to do it (get involved with NOVA shares) and was heading off to Britain (in connection with that), but the Osaka district prosecutors stopped me, so I couldn’t go.”

So, the Mainichi sat on this info for 18 days?

Perhaps they couldn’t verify it. After all, last Thursday, Saruhashi told the Mainichi, “I’ve never heard of Nishida, nor have I met him. A lawyer was dealing with the funds and I’ve heard the lawyer has had nothing to do with him, either.”

Note: EdiNET of course has a frustratingly stupid user interface and does not properly process GET variables from an HTML form.

FSA: Let the regional banks fail, it’s Takenaka’s fault anyway

With few signs that problems at Japan’s regional banks are clearing up, it seems that some members of the Financial Services Agency are encouraging the government to let the banks fail. This would allow for depositors to receive up to 10 million yen of funds in their accounts, as the Japanese government capped its deposit guarantees at that level in 2005.

What happened? The Nikkei tells us this:

Since 1991, 181 financial institutions have filed for bankruptcy protection. About 80% of the total, or 144 filings, were submitted from 1998 to 2002. Hakuo Yanagisawa served as financial services minister during much of this period. After Heizo Takenaka took over the post in September 2002, however, only Ashikaga Bank went belly up.

And then lets us know that there is ‘a view’ that Takenaka’s relaxed stance on regional banks led to sloppy management practices, which led to the problems we see today.

Good to see they’ve found someone to pin the problem on.

Nova’s President Saruhashi ousted; Nova files for bankruptcy protection with 43.9 billion yen in liabilities

The Yomiuri provided some late night/early morning articles that certainly woke us up: According to one article, Nova President Nozomu Saruhashi failed to show for an emergency board meeting and was dismissed by the other board members. Board member Katsuichi Watanabe is now apparently in charge of the firm.

A second article tells us that Nova’s liabilities are no small potatoes - according to the Yomiuri, Nova’s debts are somewhere in the neighborhood of 50 billion yen. This is slightly lower than the 60 billion I had been estimating, and higher than the 46 billion listed on the company’s most recent financial report. The firm apparently intends to petition the government for bankruptcy protection under the Corporate Rehabilitation Law. Edit: The application has been approved.

More on this story as news develops.

Edit: This morning’s Nikkei tells us that Nova has 43.9 billion yen of debt, JASDAQ tells us that the company is due to be delisted from the stock exchange on November 27th, and trading on the issue has been shut down for today.

Bloomberg is saying (via Kyodo) that operations have been suspended, and no branches are open.

Saruhashi is apparently no longer the majority owner of Nova’s shares. I’ve seen estimates of his holdings ranging from 16% to just under 25%.

Edit 2: From Bloomberg’s little nuggets on the current day’s trading:

Read more

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