Made a Big Gain with Gajo-En deal, but Conceded 4.5 Billion Spread with Tomakomai Development
July 20, 2016
Tomakomai is a port city located in Hokkaido, and untouched nature at eastern part of it surrounding Mt. Tarumae is preserved as the National Park Sikotsuko-Toya. It was in 2012, when a 1,000 hectare plot of land adjacent to the 10,000 hectare national park was proposed to be developed as a Yosemite-like resort. Yosemite in California boasts 740 meter high cataract, and attracting 3.5 million visitors annually to the magnificent glacier-shaped valley. The project at Tomakomai was intended to realize a Yosemite-style park. The plan was made by Norden Wald (German "Northern Forest"), a private company headed by Yuichi Ishikawa. His mainstay company Plough' home page lists up his colorful career. After graduating from Hokkaido University, Ishikawa joined a trading company Toshoku (now Cargill Toshoku), and mostly worked outside of Japan including Saudi Arabia. According to a person close to him, he is very well-connected and serves in boards of various institutes such as "Research Institute for National Policy", and is the Chairman of "Hokkaido Bobsleigh Federation".
Orix Withdrawal made the project to flounder
The development project assumed an investment of Orix, a major non-bank, with Asian hotel operator General Hotel Management soft-agreed to take part, and construction design contracted to Nikkei Design Office. The land was prepared, and the city of Tomakomai approved development plan in November 2012. Yet, Orix pulled out, as its CEO Yoshihiko Miyauchi retiring, thereby the Japanese version of Yosemite started to flounder. Then, the one Akihiko Matsumura, Ishikawa's classmate at Hokkaido University appeared in lieu of Orix. He was more than a mere classmate; this newspaper had an article in November 2008, "A Dubious Company Manipulated by Ghosts of Harunori Takahashi". Takahashi was a bubble-era star property developer heading EIE, which eventually generated lethal amount of non performing loans to the bankrupted Long Term Credit Bank of Japan. He was arrested/indicted in charge of breach of trust, and convicted in Tokyo High Court, and suddenly passed away with a stroke in 2005 (former senior managing director of Dentsu, Haruyuki Takahashi is his elder brother). Many Harunori-related people were on the board of Trans Q Technologies, led by this Akihiko Matsumura. Matsumura boasted that he can invest 5 billion yen, as he had just made an IPO in Singapore, but, as usual in case of such a talk, the investment did not materialize.
One and half year passed since the project obtained the development approval, in summer of 2014, Masaki Murata, the president of MA Platform, was introduced by a friend in a foreign investment bank. As its "MA" abbreviation implies, it is a private investment company 100% owned by Akira Mori, the president of Mori Trust, a major developer. In September after a meeting with Murata, Akira Mori visited Tomakomai. "I am not enthusiastic about Hokkaido as resort," he commented. But, as if a replacement, along with Murata, Miki Kanbara (Sun Chongpeng), a female Chinese businessperson visited, showing a name card of "President and Representative Director, MK Trust Co. Ltd.", and she asserted. "This company is jointly run by Mr. Akira Mori and me". MK Trust was established in May 2011, having an office on the 10th floor of "Toranomon 2 chome Tower", where another company Kanbara is president, Moriizumi also has an office. The building serves as the headquarter office of Mori Trust as well. Mori and Kanbara established MK Trust in May 2011, with objective of pursuing M&A and investment deals in China. (Akira Mori and Masaki Murata were sitting on the board of the MK Trust from 2012 to May 2014.) It seems no wonder that a back up from Akira Mori was the biggest credit of the company.
1.4 billion Yen Fee earned by the Gajo-En Deal
Kanbara's name was widely recognized when Mori Trust flipped Meguro Gajo-En and made a good capital gain. In August 2014, Mori Trust bought the office building in Meguro, Tokyo from Lone Star, a distressed fund at 130 billion yen. In just 5 months, the trophy property was sold to a special purpose company("SPC") of which a U.S. property investment company La Salle Investment played a role of general partner, at 143 billion yen. La Salle invested only 2.5% of the SPC, and remaining 97.5% came from the Chinese sovereign wealth fund, China Investment Corporation ("CIC"). In short, Mori Trust made a nice spread of 13 billion yen in 5 months. Why the CIC bought in such a price? In fact, CIC and Mori Trust were in tandem from the beginning. But internal procedure inside of CIC caused a delay, thus a plan was created in underwater; Mori Trust to "hold" the property for a while, and resell to CIC when it was prepared. It was Kanbara who introduced CIC to Mori Trust, and without her, the deal would not have been possible. She received 1.4 billion yen fee from the deal.
This quick return from the sale had shut down all critical voices inside Mori Trust on Kanbara. In return, curious eyes laid to her close relationship with CIC, and Akira Mori. An internet blog wrote; "a front woman from the Chinese Communist Party crooked Akira Mori".
Then, she and Murata started to control the project at Tomakomai. Upon request of Kanbara, who alluded Mori's back up, the principal of development was changed from a company owned by Ishikawa to Moriizumi owned by Kanbara. The property right of the land was also changed that way. Ishikawa's project and the property were bought by Kanbara at approximately 1 billion yen.
In October 2015, a meeting was held at the 2nd floor of Mori Trust headquarters. Kanbara, Ishikawa, and Murata joined. An agreement of forming a new company was decided, as the MA Platform does not have developer license, but Kanbara claimed Ishikawa being untrustworthy, and Ishikawa was removed from the project. At last, the principal developing entity was determined to be the MA Platform, and 5.5 billion yen was transferred from the MA Platform to a company called Hokkaido Forest, which was newly established by instruction of Kanbara. This 5.5 billion was eventually transferred to Moriizumi, a Kanbara-owned company.
If we take a closer look at the situation, Hokkaido Forest was a company aimed just to pass through the proceeds. In June 2016, it changed name to "F Co., Ltd", and changed the domicile from Hokkaido to Nishi Shinjuku, Tokyo.
MK Trust's "MK" meant Mori and Kanbara. They were that intimate, but she controlled the business in Tomakomai leaving Mori uninformed, and resold the development right and land to a personal company of Akira Mori, and earned 4.5 billion yen capital gain.
The writer of this article met Kanbara on 4 p.m. of July 1st, at the headquarters of the Mori Trust. It was the first time that she complied with an interview of mass media. The time was limited to 30 minutes, with two attorneys from Hikari Law Office accompanying. She married with a Japanese man 20 years ago (and divorced 10 years ago), and since then, running business in Japan, she said. Her home is Shandong Province runs 10 plus businesses such as hotel and properties, and she was guided by her father, and bought a company first when she was 17 years old. She worked as the chief representative of Mori Trust in China, and further she explains that she has consulting contract for China business with some big companies like Marubeni China. Regarding the Tomakomai resort development, she said a due diligence (asset appraisal) requiring 1 year was conducted. And in February 18th, 2016, at Tourist and Investment Seminar co-hosted by JETRO (Japan External Trade Organization) and Hokkaido, she and Murata sat on the podium, and talked about the attractiveness and prospects of the Tomakomai development.
She is in charge of China, nothing to do with Japan
The property deal looks as if Kanbara recovered 4.5 billion yen from Akira Mori's private company in return of 13 billion yen Mori Trust gained from CIC's rich valuation on the Gajo-En purchase, but the smooth remarks of Kanbara never hinted such clues. When I asked this point to Akira Mori, he gave an unexpected reply. "I was never aware of such a seminar. I have never heard," he raised his voice in sulky mood. "She is in charge of China, she does nothing more than that, and I never ask her beyond that, and I never allow that!"
What happened on Mori and Kanbara? I further asked, "but wasn't Murata-san, the head of your private invest company deeply involved the Tomakomai development with Kanbara-san?" Akira Mori, did not get angry, but fended off my remark with a body action. "Wait a second. She is for China, and nothing to do with Tomakomai. Same with Murata. I have never heard from Murata."
Presumably, Akira Mori could not confess with mass media. It seemed his feeble protest somewhat reflected his true intention. "Whatever it takes, how many decades, we will complete the development", as if persuading himself, Akira Mori concluded. It is interesting to see how he react to former partner Kanbara and subordinate Murata, having at last fully realized the shrewdness of Chinese business way.