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Japan Land was also not able to avoid the timing of the resignation made by auditors Ernst &
Young. The issue cropped up after Japan Land's independent director, lawyer and Member of
Parliament for Tampines GRC Sin Boon Ann, resigned from the board. Mr Sin as he was not
satisfied that the firm has adequate control of its operating subsidiary, Japan Asia Land
Limited. Based on the proven incidents happened , Japan Land exhibits lack of proper
monitoring and reports of subsidiaries. Their auditor, Ernst & Young raised concern on the
issue of the lack in timely communication and sharing of information between Head office
and the AC with regards to the subsidiaries especially JALL. They had also highlighted that
the overseas reporting entities had lack of accounting knowledge and compliances. It was
reported that investment proposal of JALL (Fuchu, Japan) and JDD (Singapore & Vietnam)
was not notified to Japanland board for evaluation and approval. Moreover, the budget report
of the Vietnam project had no proper budget details and projections. There was also no timely
cashflow and project report by JALL to its parent firm.
In addition, an inter-company loan of S$10 Million to finance Fuchu Data Center (matured in
2009) was signed and extended to 2011 by Mitsutoshi Ono behalf of Japan Land & JALL
Executive Director Yoko Yamashita without notifying the board. Nonetheless, even the
proceeds from the Data centre was not employed to repay back the loan. JALL also issued
JPY 700 Million worth of bonds to Aizawa , a related party using Japan Lands investments
as security and it was also not alerted to the board.
Conclusion
For running the business of companies, especially large public companies there is need for
efficiency, transparency and accountability. Corporate governance is the process to control
and direct the companies for long term results. There has been many ways to achieve this via
good corporate governance but failure of some big companies raised various questions and
issues. One of these big corporate failures is the collapse of Japanland, a successful company.
There were many reasons for the collapse of Japan Land but one of the major concerns was
the role and lack of effectiveness of management as well as dual positions. Along with these
problems is the issue when companies give too much power in the hands of an individual .In
many cases one person enjoy the powers of two separate, the combination of these two
important position results in the concentration of powers in the hands of one person and thus
results in the abuse of powers.