The Japanese government has decided to extend the deadline for the continuation of sales of shares in Japan Post Holdings by five years.
The schedule had previously been for the privatisation exercise to be completed in the financial year starting on 1 April 2022. The new deadline is the fiscal year ending March 2028, reported Jiji Press yesterday.
Draft legislation is expected to be submitted to the ongoing ordinary session of the Diet to extend the deadline.
Media reports link the postponement to a scandal at the subsidiary Japan Post Insurance. The insurer was found last year to have engaged in improper insurance sales, including charging double premiums. The misconduct resulted in a suspension of policy sales by the insurer and the resignation of three chief executives in the Japan Post group. Investigations into the misconduct are still on-going.
The government plans to decrease its stake in Japan Post Holdings to just above one-third eventually. It hopes to raise an additional JPY1.2tn ($11bn) by selling more of its Japan Post Holdings shares, which along with the JPY2.8 trillion it has already secured would bring the total funds it has sourced from sales of the shares to JPY4tn. The government currently holds a stake of 57% in the holding company.
Proceeds from the sale of government-held shares in Japan Post Holdings will be used to redeem bonds that were issued to fund reconstruction of areas devastated by the March 2011 earthquake and tsunami.