{"id":201719,"date":"2010-01-20T02:36:36","date_gmt":"2010-01-20T07:36:36","guid":{"rendered":"http:\/\/www.businessinsider.com\/japan-airlines-bankruptcy-setting-of-wave-of-write-downs-2010-1"},"modified":"2010-01-20T02:36:36","modified_gmt":"2010-01-20T07:36:36","slug":"japan-airlines-wipe-out-sets-off-wave-of-write-downs-throughout-corporate-japan","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/201719","title":{"rendered":"Japan Airlines Wipe-Out Sets Off Wave Of Write-Downs Throughout Corporate Japan"},"content":{"rendered":"

\"Japan<\/p>\n

As Japan Airlines’ bankruptcy wipes out its shareholders, the nature of corporate Japan’s peculiar cross-investment tradition, investments between different companies in each others’ shares, means that a wave of write downs is ahead for a wide swath of corporations.<\/p>\n

For example, the conglomerate Sojitz Corporation has already been forced to write off over half of their full year profit as a result of their JAL share holdings gone bad.<\/p>\n

Many other firms face similar prospects.<\/p>\n

Business Week:<\/a> Sojitz Corp. wrote off a 15 billion yen ($165 million) investment in Japan Airlines Corp., becoming the first of 14 partner companies to take a charge on their preferred stock in the bankrupt carrier.<\/p>\n

The Tokyo-based trading company is assessing the effect of the loss on earnings, according to a statement distributed through the Tokyo Stock Exchange today. Japan Airlines yesterday filed for bankruptcy, the nation’s fourth-largest, under a 900 billion yen turnaround plan after four government bailouts failed to revive Asia’s most indebted carrier.<\/p>\n

Japan Airlines received a total of 151.5 billion yen in February 2008 from affiliated trading houses, banks and energy companies, including Sojitz, Mizuho Financial Group Inc. and Mitsui & Co., to help shore up finances. The writeoff by Sojitz represents more than half its projected net income of 27 billion yen for the year ending March 31.<\/p>\n

Such knock-on effects resemble what happened to banks during the financial crisis, yet for Japan these knock-on effects are interestingly playing out in non-financial business space due to the nation’s odd corporate cross-investment tradition. Read more here ><\/a><\/p>\n

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