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More on the BoJ’s Fukui June 22, 2006

Posted by fukumimi in Finance, Japan.

Governor Fukui's hole seems to be getting deeper and deeper.

Having previously stated that he didn't "make much" on his investment with the Murakami fund, it transpires that his original JPY10M had grown to JPY24.7M in 6 years or so. This during a time where ordinary people were earning about 0.1% annual interest on their savings accounts, or 0.001% annual interest on their basic accounts.

He also said previously that he had not realised any profit from his investment, yet 5 years ago, JPY2.42M was paid into his bank account. 

Major media outlets are also discussing the timing in february of his decision to withdraw his funds from Murakami & Co., specifically citing possibilities such as a leak regarding the investigation into Murakami's suspected insider trading, or the BoJ's monetary policy shift about which Fukui would have had full knowledge.   



1. Chris_B - June 29, 2006

IMNSHO the problem isnt Fukui himself but the horrid governance structure of the BOJ. No disclosure or blind trust requirements and a VERY cushy salary for the BOJ governor? Pretty much a recipe for corruption.

2. fukumimi - June 29, 2006

Indeed. If one were naive enough to take Koizumi at his word, one might actually expect him to deal with such issues as part of his structural reform package. One might also expect him to install someone who is committed to change for the better, and would set a moral example, rather than fall back on the “there aren’t any rules” defense (although I wholeheartedly agree that rules are required – indeed, with all the talk about reform, why after so long aren’t the rules in place? ans: probably because Koizumi is only interested in reforms which curry favor with his set of backers), and obfuscate in his explanations for his actions.

It is now coming out that the investment fund partnership in which Fukui’s money was invested (and which was managed by Orix, whose Chairman Miyauchi started Murakami’s fund business with a $30M injection) contained just Fukui’s money, ie the fund was a vehicle set up solely for Fukui. He had refused to divulge the identities of “other members” of the fund partnership because of privacy concerns relating to identifying other members. It is difficult to believe that Fukui didn’t know that there weren’t any other partners….. (The original partnership contained several other partners, but that partnership was wound up (this is when Fukui received payment of approx JPY2.4M, contrary to previous assertions that he hadn’t realised a penny from his investments with Murakami) and Fukui put his money into the new partnership, of which he was the sole LP)

In a country which cares about shady dealings of its top officials, he’d be out. But you never know with Japan.

3. Chris_B - June 29, 2006

great news, thanks for the update.

My bet is nothing bad will happen to him. He gets to serve out his time, keep his profits and his fat salary and enjoy the good life from now on.

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