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Wednesday, October 3, 2012

US Company Sells Love Hotels To Yakuza?

I had to do a double take when I saw this story. Cargill? Love Hotels? WTF?

Cargill, Incorporated is the largest privately-held corporation in the U.S. by way of revenue - which was US/Cdn $119.5-billion in 2011... that's over ¥9.3-trillion. Founded in 1865 and headquartered in Minnetonka, Minnesota, Cargill is into lots of agricultural commodities, energy, steel, transport, livestock, feed, palm oils and much, much more.

But Japanese Love Hotels?

It sounds like a smart business venture. Sex sells. Even if you aren't doing it, millions of others are. Did I say 'you'? I meant me. At this moment.

People at the multimillion dollar telecommunications company were asked how the company could make money on-line... I thought about porn.

And then I answered 'porn'. Everyone laughed. I was thought the fool because it was sex. Idiots.

Why so many porn sites on the Internet? Because it sells. Sex really does sell. Vibrators, dildos, high-heeled leather boots, riding crops, erotic literature, porn sites with elite content.... you know that free stuff you surf? Try paying for it and see what sort of filth you can view!

But a Love Hotels? I love the spunk of Cargill. No really, but you know what I mean.

The properties were actually sold by CarVal, an independently managed subsidiary of Cargill Inc. 

Here's what CarVal managing director Ann Folkman had to say: “While leisure hotels may sound salacious, they are a legitimate and longstanding industry that caters to the privacy needs of young Japanese adults, who frequently live with their parents or in company-provided housing.”

“As with many of the hotels we have invested in across the world, the investment strategy was to run a compliant business, create sufficient scale and operational regularity and then exit to a buyer who could see the value of the business.”

What is a Love Hotel? A Love Hotel is a room you can rent for the night or for the hour. They know what goes on in there and they aren't judging you. Hotel rooms can have themes to them - like the Star Wars room, or the Tarzan room or the Marquis de Sade room, Pirates of the Caribbean, Pokemon room, or the Alice in Wonderland room... if you can think of it, I'm guessing some other twisted mind has built a theme room just for you and your other twisted significant blow-up friend. And I'm not judging anyone here. I did tie-up Junko, after all.  And that's all I'm saying.

In 2004 and 2005, Cargill bought 10 Love Hotels, including the Hotel Shine in Tokyo. That's the Hotel Shine in the photo up above.

At Hotel Shine, about ¥3,000 ($38) gets you 90 minutes in a boring hotel room with a King Size bed. According to Leisure hotel, a trade publication, the industry has sales of 2 trillion to 3 trillion yen, or $38 billion, a year.

Now... it may come as a surprise to you, but it appears as though while sex sells, not all love hotels are created equal, and though love hotel business is always in demand (I love the Hotel 555... five in Japanese is the word 'go'... so it's the Hotel Go-Go-Go... which is what you are supposed to do at a Love Hotel. Brilliant), Cargill wasn't happy with the investment... selling 10 properties a week ago for $20-million (¥783-million)... taking a $40-million loss (¥3.130-billion)!!!

They lost money because their properties are boring! A King Size bed is the attraction? 

Aside from the financial loss, Cargill is also hearing it from CarVal's partner in the Love Hotels, one Alchemy, who managed the hotels. Documents filed in court state that CarVal violated business agreements by selling the properties before their contract was up in October 2014.

Let's clap for Cargill. Owtch. Love Hotels hurt when I pee.

And, if that wasn't bad enough - the goons CarVal (Cargill) sold the hotels to - Plus Ten Mind (Japan really needs to stop using English for its company names) via Kato Pleasure Group - is strong-arming people. Kato Pleasure and Plus Ten Mind have the same chief executive officer.

Immediately after the sale on September 27, 2012, men in black suits (probably tattooed, legitimate business men) forced out workers and guest and then barricaded the entrances with wood fences.

Apparently two executives who managed the Hotel Shine (when it was owned by CarVal) - are stuck inside the hotel - refusing to leave, causing the police to become involved. I'm unsure if the police are sending in clean sheets and towels and those little hotel shots of alcohol that cost as much as a large bottle.

Alchemy says it repeatedly warned CarVal to not sell to Kato Pleasure Group as it has ties to organized crime - the Yakuza.

“Our complaint to CarVal is that they ignored credible advice that they were dealing with a suspected organized crime entity,” says Miro Mijatovic, Alchemy’s chief executive.

Folkman offers that CarVal had no involvement in the hotel sweeps hinting that Alchemy, which was hired in 2008 to manage the hotels, had encouraged the employees to remain to attract publicity. “We believe Alchemy’s dissatisfaction with the sale is motivating their behavior, and we believe many of the claims they are making to The New York Times and others are wholly without merit.”

She said that Alchemy was trying to protect its own business and that it had demanded ¥300 million ($3.9 million) to leave the hotels. The demand, she said, was “without any legal basis.” Alchemy, she said, has tried to disrupt the sale because it would like to buy the hotels.

Mijatovic countered that Alchemy’s agreement with CarVal had two years remaining and that his company had sought the money to make up for fees lost because of the early termination.

CarVal, which became a wholly owned subsidiary of Cargill in 2006 was an early US company to buy portfolios of bad loans and distressed properties after Japan’s real estate collapse in 1990.

Alchemy asked Kroll Advisory Solutions - a corporate investigations and risk consulting firm - to create a report for them to give to CarVal. This report says that the Yamaguchi-gumi, Japan’s largest Yakuza outfit invested ¥30-million (~$383,000) in the Kato Pleasure Group.

Japan has recently strengthened its laws against doing business with organized crime and the U.S. Treasury department has banned any dealings between US citizens or companies and the Yamaguchi-gumi.

Kato Pleasure Group denies it has any links with the Yakuza. 

A reader has supplied video links to the raid on the Hotel Shine! Thanks!!!: MENINBLACK

Make love not crime war.

Andrew Joseph


  1. Videos of the raid by the men in the black suits

    1. Thank-you, my friend! I have added your link up in the blog itself. I actually did it a few minutes after you posted the comment! Cheers!