TOKYO, Oct. 23, 2023—It’s widely known factually and anecdotally that Chinese businesses are acquiring Japanese real estate properties at a pace that at the end of day the entire Japanese archipelago might be owned by the Chinese. But that is not what this Prospect story is about: Chinese investors have acquired a controlling stock holding of a publicly-traded Japanese company that fully owns an unlisted company that operates all seven Tokyo crematoriums that charges even higher cremation fees than what already had been the highest in Japan. The acquisition is disabling impoverished families to abandon their deceased kin without proper burial rituals, and the Tokyo government is confronted by a growing number of urns of ashes whose families aren’t likely to show up to collect them in part to avoid the cremation fees.
According to the securities report filed by Kosaido Co. with the Ministry of Finance, PA Ace IV (HK) Limited held 18.64 percent of the company’s common shares as of March 31, 2023; Global Worker Haken (dispatch) K.K. 13.79 percent; Aso Co. of the former finance minister, Taro Aso, 9.46 percent; and R&L Holdings, 8.91 percent.
In 1992, Kosaido became a major shareholder of Tokyo Hakuzen Co., a cremation company founded by a politician in 1887, and in 2020, it acquired Tokyo Hakuzen fully on the condition that Kosaido, which began as a printing company, shall not relinquish its Tokuyo Hakuzen share holdings for no less than 10 years.
In 2021, The finance minister’s Aso Co., which had been holding 20 percent of Kosaido, sold off 8 percentage point of its holdings to 12 percent. By March 31, 2023, Aso lowered its Kosaido holdings to 9.46 percent while Global Worker Haken surfaced as the second largest owner with 13.79 percent and R&L Holdings as the fourth largest with 8.91 percent.
Global Worker Haken CEO is Li Xie who fully owns Chubun Sangyo Co. of Tokyo. That publishes a Chinese language newspaper in Japan and worker dispatching services as well as other businesses.
Ms. Li is believed to be associated closely with Yiwen Luo, a Chinese business executive that owns Laox Co., one of top electric products retailers in Japan.Yiwen Luo owns R&L Holdings. Combined, PA ACE IV (HK), Global Worker Haken and R&L Holdings command 41.34 Kosaido share holdings.
In June 2023, Kosaido announced that Global Worker Haken’s Kosaido holdings were increased to 14.61 percent from 13.78 percent (the number of shares were unchanged) becoming the largest shareholder from No. 2, and Aso’s holdings rose to 10.02 percent from 9.46 percent (the number of shares also did not change) rising as No. 2 shareholder from No. 3. It also said that PA Ace IV (HK) Limited’s shareholdings of Kosaido shrank to 9.98 percent with the number of shares decreasing to 2.687 million from 15.06 percent and 4.297 million), falling to No.3 shareholder from No. 1. PA Ace is listed on the Hong Kong Stock Exchange.
Also in June, Kosaido appointed the son of Masaya Wada, who founded Alpha Club Group that manages the funeral parlor service, Sagami Tenrei, as Tokyo Hakuzen CEO, less than a year after its previous CEO assumed his post and reflecting the the Kosaido board’s business aspirations for growth. Sagami Tenrei offers funeral services in the greater Tokyo area. It is a fast-growing operation expanding widely across Japan – the business model that the Chinese investors are craving for because the ending business is a most profitable business in Japan along with the elderly care and medical.
‘Tokyo Hakuzen is monopolizing the funeral cremation service,’ the owner of a small pharmacy chain told The Prospect with a tone of criticism. ‘The company is so closely connected to hospitals that families (of the deceased) cannot decide (where to cremate), and their cremation fees are very high.’ Tokyo Hakuzen’s website lists its funeral/cremation plans. The pharmacy chain owner said the actual cost is double or more.
Masako Kuraishi, a researcher based in Kanagawa, wrote in her blogpost that Tokyo Hakuzen has raised cremation fees 10-fold to levels not affordable to many Tokyo residents. She said not only its services are so extremely profit-oriented that its funeral services do not allow sufficient time and environment for families and friends to mourn the deceased but the fact that its funeral service business share in Tokyo is an unusually high 70 percent and more violates Anti-monopoly Law provisions. Thus far, the Japan Fair Trade Commission has not shown any signs of acting.
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