Japan’s ‘killer condo’ scandal widens

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Japan’s “killer condo” scandal escalated on Wednesday when it emerged a second architect had falsified earthquake safety data on at least three apartment buildings in a southern city.

Earthquake-resistance data was found in December to have been faked on close to 100 buildings throughout the country by one architect. Wednesday’s findings will compound public fears that systematic deceit is entrenched in the country’s construction industry.

The land ministry said an architect in Fukuoka prefecture had tampered with data on buildings in the city of the same name. The findings came to light after an investigation into Kimura Construction, a now-bankrupt company that was earlier implicated in the scandal.

The burgeoning scandal has already reached the upper echelons of Japan’s ruling Liberal Democratic Party, which has long enjoyed cosy relationships with construction and real estate firms, one of their biggest traditional support bases.

Analysts said the crux of the problem was that Japan’s construction industry had not undergone consolidation, leading to a glut of smaller, unprofitable companies that are under pressure to cut corners to make ends meet.

“Construction is a sector full of zombie companies that have had their debt forgiven multiple times, sometimes with taxpayers’ money,” said Yoji Otani, real estate analyst at Credit Suisse.

Other observers say the symbiosis between the LDP and the construction sector is to blame.

Shinzo Abe, the man widely expected to succeed prime minister Junichiro Koizumi in September, was in the spotlight last month when it emerged that the president of Huser – a condominium developer at the centre of the scandal – met his policy secretary in a bid to convince the land ministry it should provide Y5bn in loans so Huser could compensate residents forced to flee unsafe buildings.

Mr Abe said on Wednesday the government would take strict disciplinary action against anyone found involved in the fabrications, following further investigations.

The scandal has also played a role in denting the approval ratings of Junichiro Koizumi, Japan’s prime minister. A Nikkei opinion poll released on Monday showed approval for Mr Koizumi plunging 14 points to 45 per cent in December. According to the same poll his disapproval rating rose 9 points to 43 per cent.

An advisory panel from the private sector on Wednesday submitted a report to the government outlining ways to prevent recurrences of data falsification.

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