What about Japan?
Hello. I'm Mike, a lawyer living in Hong Kong.
Now, in Hong Kong, a city I envied with all my heart, I remember again how Japan was 180 degrees opposite. I have written about two disappointing incidents before, but my real disappointing experience in Japan was when I was in the legal department of a foreign securities company. I was there from just before the end of the 1990s to around 2010, so hopefully things have improved since then, but the on-site inspections by the FSA at the time were appalling. First of all, "customers" would suddenly arrive without notice. And there were about 20 of them. It was as if the FSA had raided Livedoor. The team was divided into platoons and went to the target department. The legal department is the first target because it is the storehouse of information for the whole company. Without a warrant, they suddenly come into the office and say, "Excuse me," and their eyes say, "Don't move. "What kind of work do you do?" He will open a cabinet and ask if he can borrow something. I can't say no. You can't say "no". They don't take into account the fact that it might interfere with their work. There's no warrant. Then they take over one of our meeting rooms for inspection and stay there for about three months. During that time, the legal department, including the front desk where I was spotted, is called in every day for an "interrogation". They said: "What is this? You're hiding a trick! Tell us!" "We are law-abiding and honest. We are law-abiding and honest in our work. "Don't lie to me! My eyes are not deceiving me! You're right, sir. I was wrong." "Sign this and bring it to me! The conversation is repeated. If you disobey, you will be beheaded. Even when the content of the letter is something that can only be laughed at, they say, "You are right. We are sorry. and write a report with about 100 remarks. For example (and I can't be too specific), on a difficult case where the CEO made the final decision after much deliberation, I would write "the CEO made the decision on his own and governance did not work", or on a large case where representatives from both companies were present and signed a contract, I would write "the signature was not genuine or the signature ship (I've never used that word before)". (I had never used this word before and I couldn't help asking what it was).
THE IDEA OF THE AUTHORITIES WAS, AT BEST, TO MAKE SURE THAT THE COMPANIES UNDER THEIR SUPERVISION COMPLIED WITH THE LAW, BUT IN ESSENCE IT WAS A STRUCTURE IN WHICH THE GOVERNMENT OFFICIALS SAT ON TOP OF THE COMPANIES TO SHOW THEM THEIR POWER AND MAKE IT IMPOSSIBLE FOR THEM TO RESIST. IT IS SAID THAT EVEN WITHIN THE AUTHORITIES, THE AMOUNT OF REMORSE WRITTEN BY THE COMPANIES WAS A TARGET FOR EVALUATION. IT IS NO WONDER THAT THE POSITION OF MOF OFFICER EXISTED AS A CAREER PATH UNTIL THE MID-1990S. SO TO GET A FINANCIAL BUSINESS LICENSE IN JAPAN, YOU HAD TO BE PREPARED TO PAY A HUGE COST IN DEALING WITH THE AUTHORITIES. TO AVOID THIS, I WORKED FOR A PE FUND WHICH HAD A STRUCTURE THAT DID NOT REQUIRE A BUSINESS LICENCE, BUT THIS WAS BECOMING TOO CONSTRICTING, SO I MOVED TO HONG KONG.
IN JAPAN, YOU WOULD THINK THAT THIS KIND OF INSPECTION IS NORMAL, BUT WHEN I TOLD THIS TO MY COLLEAGUES IN THE LEGAL DEPARTMENT IN NEW YORK, LONDON AND HONG KONG, THEY DID NOT UNDERSTAND AT ALL. IN LONDON, FOR EXAMPLE, THERE IS AN INSPECTION BY THE AUTHORITIES, BUT YOU ARE GIVEN A LIST OF DOCUMENTS TO SUBMIT A FEW DAYS BEFORE THE INSPECTION, AND THEN YOU HAND THEM OVER ON THE DAY OF THE INSPECTION, AND IT ONLY TAKES A FEW DAYS TO ANSWER A FEW QUERIES. THERE IS NO STRESS AND NO DISRUPTION TO BUSINESS. IN HONG KONG, I DIDN'T EVEN KNOW THERE WAS AN INSPECTION.
I'll leave it at that for health reasons and continue in the next article.
