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Finance Ministry sold state-owned lot to aviation academy for a bargain

  • January 8, 2018
  • , The Mainichi
  • English Press

A vast swath of a state-owned land lot in Yamanashi Prefecture was sold to a local school operator at a heavily discounted price after the corporation continued to use the property without permission for nearly half a century, it has been learned.


The Japan Aviation Academy (JAA) acquired a total of approximately 6,566-square-meter lots in Kai, Yamanashi Prefecture, from the Ministry of Finance’s Kanto Local Finance Bureau at a price one-eighth of the appraisal value in May 2016, after the bureau left the school operator’s unauthorized use of the property unattended for decades.


The details of the case came to the surface after the Mainichi Shimbun obtained documents about the murky land sale. When the property was sold to the school operator, the Finance Ministry had only released the general outlines of the land deal such as the location of the lot, its sale price and the buyer, as well as the purchase date. The revelation comes at a time when the government is striving to rectify its handling of state property following the shady sale of another state-owned land lot to Osaka-based school operator Moritomo Gakuen.


According to the Finance Ministry’s Financial Bureau and other sources, the property in question had previously been managed by the now-defunct Construction Ministry and had been in use for agricultural roads and irrigation channels. When the JAA built a runway after acquiring nearby farmland in the 1960s, it also took in the agricultural roads without permission. The runway is located on the premises of what is now Japan Aviation High School run by the JAA and is used for training aspiring pilots.


“The unauthorized use of the lot came to our knowledge in 1967, when we took over the management of the property from the former Construction Ministry,” said an official of the Financial Bureau. There are reportedly no government records left about how the JAA began to use the property without consent, including records of any negotiations between the state and the school corporation. According to the JAA, it failed to reach an agreement with the state when they negotiated about the land price in the 1980s.


After the Board of Audit of Japan recommended the acceleration of deals over state-owned property in 2012, the state and the school operator reopened negotiations over the lot.


The Kanto Local Finance Bureau evaluated the land price at some 71.8 million yen, but the school operator demanded that the lot be handed over for free on the grounds of a Civil Code provision stipulating that a person who possesses any property for a certain period of time can acquire the ownership. After rounds of negotiations, the local finance bureau sold the lot to JAA at 8.75 million yen after applying exemptions. The finance bureau also stopped short of charging the school operator the full amount of land usage fees, and only demanded it pay some 1.61 million yen as the amount chargeable retrospectively under the Civil Code — or just 10 years’ worth of usage fees.


“We were aware that the land was owned by the government, but we continued to use the lot as the government didn’t charge us,” a representative of the JAA told the Mainichi Shimbun.


The Finance Ministry’s Financial Bureau expressed regrets over its handling of the case, with a representative saying, “We should have moved ahead with due procedures before the school operator came to demand the acquisition of the land by prescription.” The bureaucrat, however, added, “Since the property had no other usage, we discounted its price in accordance with criteria under laws and regulations.”


Article 162 of the Civil Code stipulates that, “A person who possesses any property of another for 20 years peacefully and openly with an intention to own shall acquire the ownership thereof.” The provision does not apply to cases where a person continues to pay rent or occupy the property using violence. The legal system is aimed at respecting the long-running status quo and avoiding social disorder.


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