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Operator of the Murakami Fund
Revealed Why He Fled out of Japan

7, 21. 2006

   Yoshiaki Murakami, Chief of Murakami Fund moved his entire investment fund as well as his domicile on 16th May 2006 to Singapore. Just prior to his departure, our reporter met him at his office in Roppongi Hills and asked him the reason behind such a move.

“In Japan, money making is considered to be bad. I think Japan is not the place for entrepreneurs and investors. I have run out of my patience. Here, incapable CEO’s treat the company as their private property. Investors also do not complain. Chummy companies have webs of cross-shareholdings between them and shut out criticism from external quarters. If you challenge the complacent management, you are blasted as greedy for money. Japan is not a capitalist country. It cannot hope to win in the global competition. I do not feel like bringing up my children in such a country.”

Business district in Singapore to where Mr. Murakami escaped from Japan.
Business district in Singapore to where Mr. Murakami escaped from Japan.

   Last year his 4th child was born. He wants his children to grow to be cosmopolitan in the free atmosphere of Singapore. When asked why Singapore? his reply was,

“It is a pleasant and a rational country. The entire country is like a hotel and does not discriminate against foreigners. Its airport infrastructure is well developed and one can fly out to anywhere even in the private plane. Authorities are investment-fund friendly and proactive towards attracting them into Singapore.

Aversion to authorities knowing about the details of large-scale funds

   Government in Singapore is powerful to the extent that it is called “Bright North Korea.” The entire country is devoted to greening of the city and disciplining of government officials, in line with the slogan “Green and Clean.” It is also known for maintaining the secrecy of financial assets and does not disclose information even if there is an inquiry from other countries. In order to attract the rich and funds into Singapore whose population is barely 1 million, taxes have been kept low and secrecy of assets is maintained to the hilt. Hotel-like atmosphere in Singapore may suit Murakami who feels stifled in Japan where people according to him feel jealous if others make money.

   Isn’t Murakami worried more about the eyes of the authorities than those of the people? He collects funds from the rich and institutional investors and earns his profit by managing those funds. His is the so-called investment fund and working funds amount to \1 trillion. His company M&A Consulting is the brain behind working out the investment strategy whereas funds are collected by his other company MAC Assets Management. Under the Securities & Exchange Law, M&A Consulting has no obligation to report to the authorities. However, if the new Financial Instruments Transaction Law gets passed by the Diet and replaces the Securities & Exchange Law, there is a strong possibility that his Fund comes under the control of the authorities. In other words, the matter of concern for Murakami is that the authorities get to peek into his business.

   According to outsiders, there is nothing to worry if you are clean but those in the trade are averse to authorities getting to peek into large-scale funds. Customer profile and method of operation are secrets.

    Especially, exposure to the eyes of tax authorities is the biggest concern as many clients use funds to save on taxes.

   There is nothing to worry if the tax authorities act warmly, but the fact that Takafumi Horie of Livedoor was persecuted for the violation of the Securities & Exchange Law and treated as an “enemy of the society” must have been enough to send shivers down Murakami’s spine. “Sham settlement of accounts” used latently by many companies for long was used to scrutinize Livedoor. “Selective application of Law” by the prosecution must have given Murakami the whiff of the risk of being in Japan.

‘Chicken-hearted’ run away just based on rumors of scrutiny

   There is a view in the market that the Murakami Fund which is the focus of all attention for buying out first TBS and then Hanshin Electric Railway is being targeted. If it is scrutinized due to characteristics of the fund, its repercussions on the investors cannot be avoided.

   Chicken-hearted panic just based on the rumors. One of the major clients of Murakami Fund was noted Yoshio Miyauchi, Chairman of Orix Corporation. He was impressed by Murakami’s approach of being a “vocal shareholder” and had invested considerable money in the Murakami Fund.

   However, it is being said that Orix has withdrawn from the fund due to recent happenings.

   Murakami could successfully sell Tokyo Style, Nippon Broadcasting System and TBS for a good price and has given 20% returns to the investors. Today share prices go up just because Murakami Fund buys it. Investors placing their faith in the Murakami Fund are increasing. However, flamboyance can antagonize public and also come into the notice of the authorities. Perhaps Murakami thought this is to be a good opportunity to move to Singapore, lay low for the time being and work out a good investment strategy. He perhaps thought that Singapore financial authorities that are so proactive on attracting foreign investment will not target him. However, wherever he operates from his home ground is Japanese share market. Murakami has already bought close to 50% of the shares of Hanshin Electric Railway. He is likely to sell his stake in Hanshin to Hankyu Holdings. The profit from this deal will be repatriated to Singapore and will not go to the Japanese Tax Authorities. He does not want to pay taxes to Japan that does not accept him. This could be Murakami style “Adieu Japan.”

Text: Atsushi Yamada

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