[No. 70] Tetsuya Inotani (née Murasugi)

My hometown is deep in the mountains of Toyama Prefecture, where I was born into the family that ran the post office in front of Inotani Station on the JR Takayama Line, which you can see in the photo. My original surname was Murasugi, but I inherited the Inotani surname from a relative, so my name is now the same as my birthplace.

I don't have a brilliant career, so I'm at a loss for what to write about. However, I heard that there are few accountants who graduated from a faculty of engineering, so I decided to take up my pen and share some thoughts from that perspective. I entered university in 1965, but I don't recall studying very hard. However, I did have many experiences through activities with my seniors in a club called the IE Study Group in the Department of Industrial and Systems Engineering, and through practical training at companies. I didn't concentrate much in my classes, but I did seriously study Engineering Economy, taught by Professor Senju, who was the advisor to the IE Study Group. I believe that the opportunity to have discussions with company employees and my seniors through corporate case studies has been extremely helpful from my graduation to the present day. Today, terms like "net present value" and "cash flow" are commonly used in situations like M&A, but I don't think such words were widely used in the business world back then. A senior from the IE Study Group, Mr. Ozu (class of 1966), was at a company called Nippon Sealol (now Eagle Industry), and I had the opportunity to do my factory training there. This connection led to them hiring me after graduation, and I have been there ever since.

I entered university the year after the Tokyo Olympics and joined my company the year of the Osaka Expo, which is when I entered the workforce. I have worked continuously in the accounting department through the period when Japan went from its post-war phase to being called an "economic animal" (around 1990, perhaps?), and through the long adjustment period from the bursting of the bubble to the present day. For that reason, I would like to write about the movements of the Japanese economy as seen from the accounting department, along with some of my own thoughts. Of course, the content is full of my own arbitrary judgments and biases, so I ask for your understanding if you have a different opinion.

In 1987, we issued what are called warrant bonds. As you can see from the stock price trend graph below, it was the peak of the bubble era. We issued bonds with warrants at zero interest and took on debt, but by fixing the exchange rate for the debt repayment five years later, we ended up making a profit when we paid back the debt. When we actually paid back the debt at maturity (in 1992), we received change, and I couldn't help but wonder who was footing the bill. I believe that the entire nation of Japan (or perhaps the world?) ended up paying the price for that time, from the subsequent collapse of the bubble through the structural recession of the heavy and large-scale industries in the 1990s. Thinking about it now, to take financial institutions as an example, there were 14 or 15 city banks at the time, but now there are only three megabanks. This may be a bit of a leap, but as long as the US does not shift away from its consumption-based economy despite the hollowing out of its industries—or to put it another way, as long as the US doesn't stop its dollar-printing presses—won't we just see a repeat of bubbles?

At the time, we weren't very savvy, so we prudently used the funds acquired from those who exercised their warrants (the funds borrowed through the bonds) for debt repayment and time deposits, which saved us when it came time to redeem the bonds (repay the debt). It would have been a disaster if we had used it for stocks or land. (This probably doesn't make much sense to those not interested in stock-related matters. My apologies.)

I recall a conversation I had with someone from a US audit firm, I believe in the late 1970s. I still remember them saying, "In the United States, the idea of cheating on taxes doesn't exist. We have a history of everyone pooling their money to hire a sheriff and ensure their safety." I was in charge of accounting and tax affairs at the time, and I thought about how in Japan, taxes have historically been seen as "tribute collected by the authorities," leading to a history of people racking their brains for clever ways to pay as little as possible. I remember being strangely impressed when I heard this story.

I myself recall starting to be particularly careful about this around the late 1980s, and I have made it a point to conduct my work with a spirit of legal compliance in all matters. My way of thinking has changed to believe that it is far more beneficial for the company's future to devote energy to forward-looking tasks rather than wasting power on clumsy cover-ups or deception.

Scandals continue to occur around the world even today, but I am committed to striving more than ever to maintain and improve "legal observance and compliance in all matters."