Madoff in Japan

Investment industry watchers all over the world are seeing shades of Bernie Madoff’s Ponzi scheme in Japan’s Kazuhiko Asakawa, head of AIJ Investment Advisors Co. which is under investigation for the disappearance of investors’ funds estimated between $2.3 billion and $3.1 billion. Not much is known about Asakawa except that his stint as a branch manager for Nomura Holdings – a globally known multinational conglomerate dealing in financial services and management consulting – drew clients, undoubtedly lured by the promised returns of five to 10 percent on their investments.

Of course, savvy scam artists would know that an easy way to make victims bite is to dangle just high enough percentages on returns, not over the top double-your-money schemes to make it believable – which is exactly what AIJ did, as it continued to yield seven to 10 percent steady returns even during times when global market trends were experiencing ups and downs especially during the turbulent periods in 2008. Officials of the Securities and Exchange Surveillance Commission of Japan believe Asakawa and his accomplices – said to be two men and a female executive – transferred the missing pension funds to an account in the Cayman Islands, then to a trust bank in Bermuda after which it was moved to Hong Kong where unfortunately the trace has stopped. 

Both Asakawa and Madoff employed creative accounting techniques to hide the losses, doctoring reports sent to investors to project a bogus front of impressive performances over the years. But unlike Bernie Madoff who victimized big corporations and wealthy individuals including close friends who practically begged the American financial advisor to accept their investments (perhaps mainly due to a carefully-cultivated image of respectability and the fact that he played hard-to-get by requiring would-be investors to submit recommendations from existing investors), Asakawa and AIJ mainly targeted the pensions funds of small to mid-size companies.

Observers have also noted that in both Madoff and Asakawa’s cases, Japan’s and the United States’ respective Security and Exchange Commissions were rather lax in implementing their regulatory functions, allowing the scams to proliferate for so long. (Madoff has since been sentenced to 150 years in prison.) The big difference between the two con artists is that a lot of Madoff’s victims would like to get their hands on him – with US authorities finding their hands full trying to secure him from getting killed. On the other hand, Japanese authorities are watching Asakawa carefully just in case he tries to kill himself.

 Presidential transport

Malacañang is planning to purchase a brand new level 12 bullet- and bomb-proof Mercedes 600 which, according to Spy Bits inside sources, could cost from half a million to as much as a million dollars depending on the options. The last presidential car purchased in 2007 has been in constant need of repair ever since it was submerged in the floodwaters of Ondoy in 2009, making it a high security risk for presidential land trips.

Considering President Noy’s continued adherence to a “no wang-wang” policy and given the reported threats to his security, a top-of-the-line presidential limousine that could withstand bullets and bombs is obviously warranted – although it will probably not be in the same league as Barack Obama’s heavily armored Cadillac nicknamed “The Beast” which, according to the Secret Service, can stand chemical weapons attacks and is armed with shotguns, tear gas canisters and state-of-the-art communications technology. Armored vehicles though have a major handicap in navigating through steep ramps, like what happened to Obama during his visit to Dublin, Ireland last year when “The Beast” got stuck after getting caught in an elevated slope at the US Embassy’s driveway.

Aside from an armored vehicle, the President of the Philippines is in dire need of a presidential jet since the existing presidential aircraft is a 35-year-old Fokker 28 jet that spends more time on the ground for repairs than in the air. The worst thing that could happen is for this country to have another tragedy like Ramon Magsaysay whose presidency was cut short by a plane crash. Malacañang has been regularly leasing the Bombardier private jet of Presidential buddy, Buddy Zamora, for an undisclosed “friendly” amount that potentially could pose a conflict of interest since Zamora’s business interests include the controversial mining business. It would be wise for the Philippine Air Force to just lease long term a new business jet and a presidential helicopter directly from international companies that offer fairly reasonable rates. Besides, any hint of “conflict of interest” could pose an obstacle to the President’s narrow path of good governance.

 Mikee R mounts polo match

Businessman and sports enthusiast Mikee Romero is holding the first Manila North Harbour Center Polo Cup (named after his company) at the Manila Polo Club (MPC) on Sunday, March 11, where his application was recently turned down by the membership committee – much to the surprise and chagrin of Mr. Polo himself, Iñigo Zobel. A couple of weeks ago, we wrote about Mikee being blackballed at the MPC reportedly by a powerful businessman who happens to be a business rival of Reghis Romero II, Mikee’s father. The young businessman is one of the few who can afford to mount players for the most expensive and dangerous sport in the world. We were informed that Mikee Romero’s Polo Club membership application is being appealed by some 200 Polo club members and friends.

Spy tidbit

Spy Bits received the latest information about the top listed companies in the Philippines with billions of dollars in terms of market capitalization. Here’s the rundown although not necessarily in any particular order, starting with the SM Group (spearheaded by Tessie Sy Coson, recently named by Forbes as one of the 50 most influential women in Asia); Ramon Ang’s SMC group; Manny Pangilinan’s PLDT Group; Aboitiz Corp.; the Ayala Group; the Gokongwei Group and last but not least, Ricky Razon’s ICTSI.

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