Japan

Economy minister returns month’s salary over pay offer to state-backed fund

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Economy minister Hiroshige Seko said Tuesday he will voluntarily return a month of pay following a fiasco in which his ministry offered annual remuneration of over 100 million yen to executives at the state-backed investment fund and later retracted it for being "too high."

"We have caused an administrative blunder where we proposed an undetermined plan to the management of the (Japan Investment Corp) and canceled it, triggering mutual distrust" between the ministry and the fund, Seko told a press conference.

Takashi Shimada, vice minister at the Ministry of Economy, Trade and Industry, will voluntarily return 30 percent of a month of his pay to bear responsibility as the ministry's top bureaucrat for insufficient supervision.

The ministry said Monday it will retract its proposal of annual remuneration of up to over 100 million yen made on Sept. 21 to four JIC executives, including its President and CEO Masaaki Tanaka, after judging that the amounts were higher than at other public-private funds in Japan.

"I had not been briefed on the amount of remuneration," Seko said. "There is a sense of appropriate level that the public can accept. (The proposed amount) was too high."

Following the decision to review the level of remuneration, the ministry notified Tanaka and held talks with him, including on Nov. 9 and Nov. 24, but the fund chief rejected the suggested changes, according to the ministry.

On Nov. 28, the fund applied to the ministry for approval of its budget plan for the fiscal year starting April, with the assumption that the amount of remuneration would be at the level initially proposed by the ministry. The ministry decided not to approve it on Monday.

The fund said Monday that it responded in line with the ministry's proposal in September and with relevant laws such as the Companies Act.

The government holds nearly 100 percent of the shares in the Japan Investment Corp, which was launched in September this year to invest in ventures, replacing predecessor state-backed fund the Innovation Network Corp. of Japan.

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