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Saturday, Dec. 20, 2008
Komazawa University axes exec over losses
By ALEX MARTIN
Komazawa University in Tokyo said Friday it dismissed its executive administrative director, Nobuo Miyamoto, on Thursday following a reported ¥15.4 billion loss from derivatives trading.
Four other members of the executive board have announced their intention to resign, but the university said they will remain in their posts for the time being to "avoid confusion" before the university's February entrance exams.
According to the university, the board made its decision based on a report by an in-house committee that began probing the transactions after the loss was first announced in November. Board member Tetsuo Otani will take Miyamoto's place in the interim.
One of the nation's oldest universities, Komazawa began currency swaps with three financial institutions in July 2007, only to see its investments deteriorate as a result of the global financial crisis.
Currency swaps involve the exchange of one currency for another on a specified schedule. Komazawa University said the loss was due to the strength of the yen against the U.S. and Australian dollars in trades through BNP Paribas, Deutsche Bank and UBS.
The university said it is rare for a person in a top post to be removed for mismanaging school assets. One staffer, who said she was informed of the decision Friday, expressed surprise at the sudden dismissal.
"Everything was decided by the executive board, and we heard about it this morning," she said.
Komazawa University's total assets in 2007 amounted to ¥94 billion. It has put up campus land and buildings to secure around ¥11 billion in loans from a bank to cover the losses.
The university said the loss would not affect the quality of education or research. No successor to the top post has been named.
Nanzan University and Aichi University, both in Aichi Prefecture, recently reported losses of ¥3.4 billion and ¥2.8 billion, respectively, as a result of similar derivatives trading.