TOKYO -- The president and CEO of Japan's public-private innovation fund Japan Investment Corp. Masaaki Tanaka and eight other executives have announced their intention to resign, Nikkei has learned. Tanaka told reporters of the decision at a press conference on Monday at the company's headquarters in Tokyo.
The exit comes after a public battle with the Ministry of Economy, Trade and Industry, who initially chose Tanaka to lead the organization this summer, over issues such as salary and control over investments. It will be a major setback for Japan, which had aimed to create a sovereign wealth fund-like investment arm to identify and support innovative businesses.
Tanaka, a former vice president of Mitsubishi UFJ Financial Group, will be followed by all eight board members that joined from private sector backgrounds. They include External Director Masahiro Sakane, a former chairman at construction equipment builder Komatsu, Deputy President Yasunori Kaneko, Chief Operating Officer Hideaki Tsukuda and Chief Investment Officer Hiroaki Toya, as well as and four other executives.
The two board members who were former bureaucrats will stay.
The mass exodus will stall operations at the fund, which had just relaunched in September, after rebranding itself from the Innovation Network Corp. of Japan. INCJ was long criticized for focusing too much on rescuing struggling businesses instead of supporting transformative enterprises. But the economy ministry, which supervises JIC, clashed with Tanaka over the amount of input the government would have in business decisions.
Signs of trouble first emerged over the high salaries of JIC executives. The ministry had previously promised to pay more than 100 million yen, or $880,000, to the top brass, but it took back the vow under public criticism.
The biggest change from the INCJ is that the new JIC is not required to seek input from the economy minister on its investment decisions, so it can remain more independent.
That stance has not gone down well with the mandarins. "It's ridiculous how little input we have, considering the money comes from us," one government official said.