Gov't panel to mull suitability of limiting foreign airport ownership

TOKYO, July 2 Kyodo - The government said Tuesday it is setting up an expert advisory panel to discuss the appropriateness of limiting foreign investor equity ownership in Japan's airport operators.

The panel will advise on the transport ministry's intention to set such a
limitation, which has drawn opposition from some lawmakers advocating foreign
investment in Japan.

The 13-member panel is expected to meet once or twice a month, starting in
early August, and to submit a report to Chief Cabinet Secretary Nobutaka
Machimura and Land, Infrastructure, Transport and Tourism Minister Tetsuzo
Fuyushiba.

The transport ministry plans to incorporate proposals from the group in an
amendment to the airport law that it will draw up for submission during a
regular Diet session convening in next January.

The panel, to be headed by Chuo University Law School Professor Seiichi Ochiai,
will include Hirotaka Yamauchi, a Hitotsubashi University professor, Takatoshi
Ito, a University of Tokyo professor, and Ushio Chujo, a Keio University
professor.

Ito and Chujo have previously criticized proposals to limit foreign ownership
in Japanese airport operators.

The other members of the panel will include experts on national security and
capital markets, government officials said.

Earlier, the transport ministry studied a plan to limit foreign shareholdings
to less than one-third in the operators of Narita International Airport Corp.,
Kansai International Airport Co., Central Japan International Airport Co. and
Japan Airport Terminal Co., which manages the buildings at Haneda airport in
Tokyo.

The ministry sought the cap on the grounds that a strong public interest is at
stake in their operations.

But the plan drew flak from Financial Services Minister Yoshimi Watanabe and
Hidenao Nakagawa, a former secretary general of the ruling Liberal Democratic
Party, as it could cause foreign investors to spurn the Japanese stock market.

Watanabe said the plan ran counter to a basic tenet of Prime Minister Yasuo
Fukuda's administration, which has called for expediting foreign investment in
Japan.

The ministry asserted that a number of foreign countries have placed similar
restrictions on foreign shareholdings in airport operators on the grounds that
such ownership could undercut national security.

But it gave up on submitting a legal provision on the matter in this year's
Diet session.==Kyodo