The Osano Connection

For Kenji Osano, one of the most powerful and controversial Japanese entrepreneurs, the results of December's national elections were bittersweet. As a close friend of, and chief political fund-raiser for, Prime Minister Kakuei Tanaka, Osano, 55, could bask in reflected glory. But as a free-wheeling entrepreneur who has done remarkably well under the long-governing Liberal Democratic Party, he had cause for concern about its losses in the Diet. He could also ponder the gains of Communists and Socialists, who intend to push harder their charges that he uses his personal and business relationship with Tanaka and other politicians to gain favored treatment. As Osano says: "Politics and business are one. They are inseparable."

Osano started almost from scratch after World War II and built a land-hotel-transportation empire worth an estimated $1 billion. Now he is expanding his foothold in the U.S., where he is already the biggest individual Japanese investor. In early 1973 he will begin building a 43-story hotel in Los Angeles with $20 million of his own funds.

The new building, scheduled to open by 1975, will rise beside the Sheraton-West Hotel, which Osano bought last May. In addition, Osano owns several dozen hotels in Japan and three in Hawaii.

These holdings pale beside his other operations. His parent company, Kokusai Kogyo (International Enterprises), was started in Tokyo in 1947 with a fleet of dilapidated charcoal-burning buses, and now embraces 38 subsidiaries, including ski areas and bowling alleys, restaurants, taxi and bus companies, and trading houses that import everything from American cars to golf clubs. Last year the company earned $26 million on revenues of $330 million. Osano is also the biggest private shareholder in Japan Air Lines, the state-operated flag carrier, and a major investor in All Nippon Airways, the domestic carrier.

The prime source of his wealth is a separate concern, Nihon Denken Co., which deals in the island kingdom's most precious commodity--land. Osano acquired the company in 1964 from Tanaka, who was too busy in his job as Finance Minister to run the firm. Though the operation was faltering, Osano shrewdly let himself be persuaded to buy and did Tanaka a favor by paying $6,000,000 for the firm, even though it was running $5,000,000 in the red. Since then Nihon Denken has boomed, and last year its real estate transactions and developments produced revenues estimated at $200 million. During the election campaign, Tanaka's opponents contended that the company benefited from inside information that the government intended to build projects on some company-owned land, a charge that both Tanaka and Osano deny.

Tanaka and Osano first met in Tokyo during the immediate postwar period when both were scrambling for the top. Their durable friendship is largely based on their strikingly similar personalities. Both are blunt, decisive men of peasant stock in a society that has raised silken circumspection to an ethic. For all his swashbuckling, Osano's greatest assets are a prodigious capacity for work and an instinct for the well-timed business deal. For example, he was early in spotting his countrymen's wanderlust, and even before Japanese tourists began rushing to Hawaii, he invested in hotels there and planes that fly there.

In a society that leans heavily on consensus and reveres education, Osano is an anomaly--a loner who never got past grade school. His headquarters are in a ramshackle building that he owns behind Tokyo Station. There he calls out orders to aides behind paper-piled desks, barks telephone instructions, and shuttles among three small drab reception rooms to negotiate with other businessmen and politicians. Osano lives only for the next deal and insists that he long ago stopped counting his winnings. "I don't know how much I am worth," he says. "I leave it to the tax man to figure out when I die."

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