TT-588 -- Logic for Spawning 400 Subsidiaries, e-biz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, October 31, 2010, Issue No. 588


- What's New
- Short Takes
- News
- Candidate Roundup/Vacancies
- Upcoming Events
- Corrections/Feedback
- News Credits

SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:


----------------- PBXL WILL BUY YOUR PBX ------------------

Is your PBX vendor requiring you to purchase a new PBX
because THE VENDOR decided would not support YOU, THE
CUSTOMER, any more?

PBXL has the solution for you! For any new CUSTOMER, PBXL
will purchase and dispose of your old, unsupported PBX and
provide you with state of the art Cisco telephony in both
cloud and managed services offerings.

Give us a call at 03-4550-2557, shoot us an email at or visit

Offer expires 15 Dec 2010.

------------ PBXL is BUSINESS COMMUNICATIONS --------------


Every now and again we get some really excellent reader
feedback, that generally appears in our feedback section at
the foot of this newsletter. Today we thought we'd do
something a bit different and feature one of these
responses as our main article.

You may recall from Terrie's Take 587, we expressed
surprise at the number of start-up companies that are
funded with capital of between JPY10m-JPY30m, being far
more than your average salaryman entrepreneur can bring to
the table. Our reader reckons there is a logical
explanation, relating to the way major firms deal with
bureaucracy and still get the job done. We think you'll
enjoy his response.

=> Our reader's comments:

Just had to share a little inside 'secret' with you - about
those 7,000-plus new ventures blessed with cash no
salary-man could ever afford in his honest lifetime (pardon
the expression). Here's how 'we' have been doing it - the
'we' being corporate Japan...

[Continued below...]

--------------- Standardizing Your Website ----------------

Do you have a sophisticated website or Intranet site that
is hard to maintain and needs an engineer every time you
want to make a change? Maybe you should standardize on an
open source Content Management System -- one which is
widely known and supported, and which lets your staff do
most of the updates themselves -- thus reducing your
website maintenance budget.

LINC Media's Electronic Commerce team builds WordPress and
Drupal CMS-driven websites that are quick to set up,
reliable, and most importantly give your marketing team the
capability of doing their own updates. Our systems include
year-round technical support and content support if you
want it, all for a competitive flat monthly fee.

To find out more, ask about our WEB PARTNERS program --
backed by a solid fully-bilingual team
with strong credentials and a desire to please.

Contact: nana.yamaguchi at for details.

[...Article continues]

The number of start-ups is quite misleading. One must not
read it the way we apply the term in other countries. Out
here if somebody started it then it's a start-up.

Take my former client [Ed: a major Japanese manufacturing
corporation] for instance. It had no less than 400 wholly
owned subsidiaries when it was acquired by an American
company some thirteen years ago. Very few people within the
company were aware of that and many of those who were aware
had no clear understanding of how and why the subsidiaries
came into existence. I made it my job to know and track

I was accidentally introduced to one of the acquiring
company's senior executives soon after he arrived - the
company was fast-tracking him into the local executive
ranks and as part of his training they'd sent him on a
mission to teach the Japanese how to turn an ailing company
around. His first project was to trim the fat from the new
baby (my client's company), and away he went slashing at
every little subsidiary he could lay his hands on.

Sometime during his third day in Hiroshima we were

He asked me what I did for the company after saying that
the lady who had mentioned my name to him had said
something about the company not being able to keep anything
secret from me for too long. He then said that he wanted to
know if I could identify any hidden subsidiaries. I said
sure, but there aren't any hidden subsidiaries. Lost
subsidiaries maybe but hidden, none, absolutely none.

He laughed and asked me again telling me not to joke about
it. I told him I was totally serious. The company had many
lost subsidiaries but none that we intentionally hid from
anybody. So I explained it to him.

Looking at the auto making business, for example, a
manufacturer will build a thousand vehicles in one shift.
And regardless of what precautions they may take in
preventing the finished product from getting dirty, seat
covers always end up needing a bit of dry cleaning before
the vehicles are shipped. No problem there. Just get a
bucket of dry cleaning agent and dip an' wipe away, right?
No sir...

Japanese law is pretty tricky when it comes to who can
handle certain chemicals for industrial use. Remember that
business start-up form that asks you to list any and all
possible business areas the new venture will be engaged in?
And remember how the guy in the registration office insists
on you listing many more business activities your new
company will do? Nobody ever believes the guy until they
try to do a new thing one or two years down the road.

As the venture grows it expands its area of business or
rather tries to, only to be told by some owl-eyed regulator
that the new area of business is out of bounds. I believe
that Nissan had no less than eight hundred subsidiaries when
Ghosn came over! And unknown to him each had a purpose
fully rationalized by Japan's archaic business regulations.

In my former client's case, in order to clean its own
products that the factory was turning out, the client found
it necessary to open a drycleaning business. The new
business was registered by three staff members suddenly
called into a cubicle for a quick, "Omedeto, Tanaka, Suzuki,
and Suzuki. You're the proud owners of a new drycleaning
business. We've gone to the liberty of doing all the paper
work for you. Oh, and we've also made and registered the
necessary company hanko, etc., as well as your personal
name seals..."

The new three-man venture was set up at a borrowed address
- borrowed from a real estate company, three-man of course,
and also in the employ of the client.

"So, what does that Realtor do?" the American gentleman
asked, genuinely interested at the intrigue unfolding
before him.

"Oh, that's easy to answer sir," I told him, "it gives the
company the right to handle real estate."

"Real estate?" he repeated to me.

"Yes", I said.

"But we're an equipment manufacturer..."

I then proceeded to explain that this was true, but if you
have workers who need housing and workers dormitories, you
can save substantial amounts of money if you are also the
owner of the owner of those facilities. And of course since
there are so many subsidiaries, channeling all their real
estate needs through a single entity also makes sense.

Thus we circled back to the drycleaning subsidiary and how
it allowed them to buy otherwise prohibited cleaning

Concerning the average start-up capital of JPY10m-JPY30m,
this is viewed as a long term investment that can be
converted back into cash when needed. Directors are
typically names borrowed from the work force and many of
these employees either have no idea they're sitting board
members or have long since forgotten they are! For every
new area of 'business' a new subsidiary is set up.

As a further example, in my client's group, to entertain
visiting reps from abroad we lodged them in the company's
guest house, requiring it to have a subsidiary which could
hold an inn-keepers license. In addition, because the lodge
had a few baths that required young women to assist male
guests - no joke sir, a particular entertainment license
was necessary there too.

The long and short of it is that the company had some very
'funny' but strictly-for-business subsidiaries that ran
without a single independent tax audit, neither profit nor loss,
IPO or other capital exit, labor report, business report,
etc., for more than thirty years. And the American
gentleman wanted to end it all. Can you imagine the look on
his face when I walked him through the many little
businesses his company owned and the perks they brought?

...The information janitors/



We recommend products and services that you might find
interesting or useful while living in Japan.

=> 1. Zinc

Continuing on with immune system supplements, one that is
very easy to overlook is zinc. This micronutrient is one of
the most important trace elements for the body and is
necessary for the synthesis of proteins, DNA formation, and
gene transfers during cell division and cell growth. It is a
co-factor in many biochemical reactions in the body,
including blood formation and the correct function of the
immune system and endocrine glands. Women on the pill
may need to supplement with zinc, and anyone working
long hours probably needs it. The best bio-available
form at present is zinc picolinate.
* referral code -- LOY499
* Pays us a small commission at no extra cost to you.

=> 2. Coming week's MMC prize
Next week's prize in the Metropolis Members Club is a pair
of high-end Adidas MI Performance Customized shoes,
courtesy of Adidas Japan.

Last week's prize was a set of Puff Nation casual clothes
from Puff Nation, won by Anna Tarasova.
* 40 prizes scheduled in the next 40 weeks.
* No charge to enter.
* Simply receive the MMC newsletter to stay in the draw.


--------- BIOS - Bilingual IT Systems and Support ---------

BiOS full-service IT solutions has a new service.

Working with our fully licenced temporary dispatch group,
we are now able to provide Japan in-country workers
for companies not yet registered in Japan.

This innovative service is available for companies needing
to hire staff for Japanese customers, but who are unable
to commit to the expense and infrastructure of maintaining
an office in Japan. We take care of all aspects of the
employment, contracting, and dispatch -- including
management of the employee.

For more information on this and other SI and IT services,
in English or Japanese:

Phone: 03-5773-3090, Email:

+++ NEWS

- Tokyo-to to drop land price in Ariake
- Softbank moving ahead of competitors
- Unemployment rate falls to 5%
- Otsuka Holdings to go public in massive IPO
- Lawson to buy HMV Japan

=> Tokyo-to to drop land price in Ariake

Faced with the reality of the falling prices in the real
estate market, the Tokyo Metropolitan Government has
decided to drop its asking price for a number of large
vacant lots in and around the Ariake/Odaiba area. On
average the plots will come down by around 7% to 8%,
resulting in prices of around JPY5.3bn for 5,100 sq. m.
near the Telecom Center on the Yurikamome monorail line.
***Ed: What surprises us is that the failure to sell these
lots has caused the Tokyo Government to have to reschedule
about JPY90bn of debt taken to finance the land
development in the first place. Given that this is yet
another multi-billion dollar money scheme that governor
Shintaro Ishihara has overseen that is going bad (the first
being Shinginko), how is it that no one seems to able to
bring him to book for it?** (Source: TT commentary from, Oct 28, 2010)

=> Softbank moving ahead of competitors

Thanks to its exclusive contract with Apple, Softbank is
powering ahead of its rivals in the mobile phone market.
The group's operating profits rose 37% to JPY315.5bn,
marking its fifth straight half-year increase. As of
September 30th, Softbank had sold 3.7m iPhones, of which
900,000 iPhone 4's were sold in just the previous three
months. As a result of the iPhone, and users propensity to
access the carrier's servers more often, Softbank's data
revenues surpassed voice revenues in Q1 this year. (Source:
TT commentary from, Oct 29, 2010)

=> Unemployment rate falls to 5%

Confounding pundits who don't see a marked improvement in
the financial condition of most companies and the economy
in general, Japan's unemployment rate fell by 0.1% to 5% in
September. Apparently most of the new hiring occurred in the
health and welfare sectors, with a small improvement in
manufacturing as well. There are currently 3.4m people out
of work, out of a total workforce of 63.09m. (Source: TT
commentary from, Oct 29, 2010)

=> Otsuka Holdings to go public in massive IPO

Otsuka Holdings, the parent of Otsuka Pharmaceutical and a
number of other drug and food firms, says that it will list
its shares in December, most likely on the Tokyo Stock
Exchange. The IPO is expected to be one of the largest in
Japan for 2010 and is likely to be closely followed by the
investing public. The group earned JPY98.5bn on sales of
JPY1.08trn, giving it a likely valuation of around JPY1trn.
(Source: TT commentary from, Oct 29, 2010)

=> Lawson to buy HMV Japan

One wonders what the synergy is, but regardless of the
logic, Lawson Inc. has said that it will buy music retailer
HMV Japan's shares on December 1st for JPY1.8bn. HMV Japan
is in all sorts of financial trouble, and lost JPY4.6bn in
FY2009 ending April 30th this year. It still has 37 stores
around the country and Lawson appears to be interested in
continuing to operate these. (Source: TT commentary from, Oct 29, 2010)

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.



=> BiOS, a Division of the LINC Media group, is actively
marketing the following positions for customers setting up
or expanding in Japan, as well as other employers of


BiOS is currently looking for skilled deskside support
staff to work onsite in operations of a Tokyo based office
equipment company. We require both level 1 and level 2
engineers and support staff, so if you are looking to use
your knowledge to get further experience in complex user
and operations support, or looking to upgrade your
helpdesk career with the next step up, this is the role
for you. Depending on the job category, duties range from
standard helpdesk receipt of calls and incident logging, to
resolution of issues and ad-hoc desk side support, and at
the high end to project, network and server work.

As this is a predominantly customer facing role you will
need to have excellent communication skills,
never-failing enthusiasm, and go-getting can-do attitude.
You will be helping people out with each and every request
you receive so as well as your excellent attitude, a few
years experience in a similar operation would be required,
and if you can show certification such as CCNA, CompTia or
MCP, or something similar it will be a great help to your

Remuneration is JPY4m – JPY6m depending on your experience
and technical level.


- Network QA Analyst, Global Telecoms, JPY6m – JPY8m
- Data Center Network Support, JPY3.5m – JPY5m
- Web Apps Support, LCD Manuf JPY3.5m – JPY4m
- IT Support Engineer, Euro Pharma client, JPY4m – JPY5m
- Okinawa IT Manager, Investment bankJPY5m – JPY6m

Interested individuals may e-mail resumes to:

** BiOS Job Mail

Every 2 weeks BiOS sends out a regular communication to its
job seeking candidates, called BiOS Job Mail. Every edition
carries a list of BiOS's current and most up-to-date
vacancies, with each entry featuring a short job
description and a direct link to the main entry on the BiOS
home page. Regardless of whether you are unemployed and
searching, thinking about a career change, or just curious
to know if there is something out there that might suit you
better, the BiOS Job Mail newsletter is an easy and
convenient way for you to stay informed. If you would like
to register for the BiOS Job Mail, or to find out more,
please email

Interested individuals may e-mail resumes to:


--------------- WASHINGTON DC OFFICE SPACE ----------------

Washington DC office available for sublet and/or short term
use. Best site in DC - right across from Union Station and
Capitol Hill. Includes kitchen, conference room, gym, and
more. Competitive rates.

Contact, for more information.



------------------- CCH HR Seminar ------------------------

CCH Japan presents 'HR Seminar 2010'

Redundancy under The Current Economic Crisis
-Redundancy of Expatriate and Early retirement program-

Speaker: Hideki Kano: Partner of Anderson Mori & Tomotsune

Date:Friday, 19th November 1:30pm-5:00pm
Venue: Happo-en 5F Room 'Linden'
Number of Seats: 50seats
Fees: JPY21,000 (Tax included)-->JPY18,900 (Tax included)
We offer a special 10% Discount for readers!!

Register at:
For more details, please contact us at:,
or 03-6234-3980.

---------------- ICA Event - November 18 ------------------

Speaker: Garr Reynolds, Associate Professor of Business and
Communication, Kansai Gaidai University, Osaka

Title: 'Presenting Naked with Visuals: Thinking Like a

Details: Complete event details at
(RSVP Required)

Date: Thursday, November 18, 2010
Time: 6:30 Doors open, Buffet Dinner included and cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members)
Open to all, at The Foreign Correspondents' Club of Japan

--------------- APABIS Economic Conference ----------------

2010 APABIS Annual Conference 'Decision-Making in a Time of
Crisis: Private and Public Perspectives'

The conference - a platform for cross learning and
understanding across public and private sectors and an
opportunity for finding answers to global crises.

Join over 150 delegates and speakers as this important
international conference explores the twin challenges of an
economic system in urgent need of reinvention and the climate
change imperative.
The conference will examine how decisions are made in the
public and private sectors. In a globalised world economy
where solutions require business, government and civil
society to work in harmony, this conference brings together
speakers, ideas and initiatives to explore new ways of
tackling global issues.

Date: November 4th, 5th 2010
Place: United Nations University, Tokyo, Japan
Price: NZ$350

----------------- Kea John Kirwan Event -------------------

On Wednesday 8 December, Kea Japan will host an evening
with legendary All Black and current Japan National Rugby
Team coach John Kirwan at the New Zealand Embassy in Tokyo.

With Japan having been selected as host for the Rugby World
Cup in 2019, we are expecting a number of Japanese friends
to attend as well on the night. Tickets are limited to 120
so please reserve as soon as possible.

Date: Wednesday, 8 December 2010
Time: 19:00 to 21:30 (doors open at 19:00)
Venue: New Zealand Embassy, Tokyo
Cost: 8,000 yen (includes all food and drinks)
Ticketing: To reserve a ticket contact

The KEA John Kirwan Event will be supported by adidas Japan.
adidas has supported the All Blacks and rugby in Japan
since the 1990's and is also proud to support this event.
A variety of Adidas prizes will be given away on the night.

This event is supported by: The New Zealand Embassy (Tokyo),
Tourism New Zealand, Kiwi Contacts and the Australia New
Zealand Chamber of Commerce (ANZCCJ).



In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to

*** No comments or feedback this week.


SUBSCRIBERS: 8,830 members as of October 31, 2010
(We purge our list regularly.)


Written by: Terrie Lloyd (

HELP: E-mail
with the word 'help' in the subject or body (don't include
the quotes), and you will get back a message with

Send letters (Feedback, Inquiries & Information) to the
editor to

For more information on advertising in this newsletter,

Get Terrie's Take by giving your name and email address at, or go
straight to Mailman at:


Copyright 2010 Japan Inc. Communications Inc.

----------------- Japan Inc opens up Japan ----------------

J@pan Inc is Japan's only independently published English-
language business website. Authoritatively chronicling
online the business trends in Japan, each posting brings
you in-depth analysis of business, people and technology in
the world's second largest economy.

Visit for the best business insight on
Japan available.

Terrie mailing list