30-05-2025
Airport Terminal Issue: Were Inappropriate Transactions Conducted Only at Haneda?
Opaque funds were flowing from a firm related to an operating company for Haneda Airport terminal buildings to a company headed by a family member of an influential politician. Why was the cozy relationship not cut off? A thorough investigation is needed, including looking into transactions at other airports.
From 2006 to 2016, a wholly owned subsidiary of the operating company Japan Airport Terminal Co., which is listed on the Tokyo Stock Exchange's Prime Market, provided more than ¥400 million to a company run by the eldest son of Makoto Koga, a former secretary general of the ruling Liberal Democratic Party, over a project to set up massage chairs at Haneda Airport.
The eldest son's company had entirely delegated the actual business operations to another company. The national tax authorities pointed out that the eldest son's company took no part in actual business operations and imposed additional taxes on the subsidiary.
Even after that, the subsidiary continued to provide funds in different forms, and the national tax authorities noted the failure of the eldest son's company to report the income.
Japan Airport Terminal is a highly public company that is allowed to operate on state-owned land based on the Airport Law and other legislation. It is unacceptable for the company to provide opaque funding that would arouse the suspicion of users.
It can be said that the incident has exposed the malfunctioning of corporate governance. It is not surprising that the chairman as well as the president of Japan Airport Terminal, who led the provision of funds, both resigned to take responsibility in response to the revelation of the problem.
In an internal investigation, the president of Japan Airport Terminal was quoted as saying that since the person in question was the son of a former member of the House of Representatives, the president was unable to end their long-standing personal relationship. The president also explained he had never asked for anything in return. The question remains as to whether the 'personal relationship' was the only reason for the massive provision of funds.
The Land, Infrastructure, Transport and Tourism Ministry has issued a stern reprimand, which amounts to administrative guidance, to Japan Airport Terminal. It also requested that 25 airport terminal operating companies nationwide investigate the actual situation, including their subsidiaries, to determine if there are any inappropriate funds being provided to business partners.
The eldest son's company has already been found to have had dealings with operating companies at two airports in Fukuoka and Osaka prefectures as well. Each operating company must conduct a thorough investigation to determine whether any improper provision of funds similar to that which took place at Haneda Airport also occurred at other airports.
The government has a responsibility to supervise operating companies for airport terminals under the Airport Law. If investigations are insufficient or inappropriate transactions are suspected, the ministry should launch its own investigation.
The government is aiming to make Japan a 'tourism-oriented country,' but it is not doing enough to check airport operations, which are the key to achieving this goal. The reality is that the selection of tenants in airport terminals and business partners is left to the discretion of the operating companies.
To prevent problematic transactions, it is necessary to require operating companies to report to the government about contract details between them and their business partners, and their actual business situation. For example, the introduction of a system in which the government conducts regular audits may also be something to consider.
(From The Yomiuri Shimbun, May 30, 2025)
