Idea Brunch with Waku Miller on Japan
Welcome to Sunday’s Idea Brunch, your interview series with great off-the-beaten-path investors. We are very excited to interview Waku Miller!
Waku Miller has worked in investor relations in Tokyo since the 1980s. That work began at a company that produced annual reports and has continued since 1988 through his own firm. Waku’s emphasis has shifted in recent years from helping Japanese companies with investor outreach to helping overseas investment firms with projects in Japan: translating reports, interpreting for interviews, and conducting research.
In 2011 and 2012, Waku handled the interpreting and media relations for former Olympus CEO Michael Woodford after the latter blew the whistle on financial misconduct. He is active today in efforts to highlight the problem of “hostage justice”—the Japanese practice of detaining criminal suspects for extended periods before they have received verdicts and using the detention to coerce confessions. Waku, who moved from the United States to Japan in 1978, is a Buddhist monk and became a naturalized Japanese citizen in 2023.
Editor’s Note: If you enjoy this Idea Brunch interview with Waku Miller, be sure to check out our other Japan-focused interviews with “Japan Guru,” “Made in Japan,” and Altay Capital. Going forward, Sunday’s Idea Brunch will be reverting to our regular U.S.-focused investor interviews.
Waku, it is an honor to have you on Sunday’s Idea Brunch!
Thank you for having me. I’m a loyal reader and am amazed at the thought of appearing in Idea Brunch. You are displaying generous flexibility in hosting me, not an investor, in this space. I hope that I can provide something of sufficient interest to justify your generosity.
What sparked your transition from the arts into investor relations, and how did those early experiences shape your approach to investor communications? How did you carve out a niche in Japan’s IR field during those early days?
I attended a conservatory in Chicago and studied trombone under the principal trombonist in the Chicago Symphony (who, incredibly, is still in that position). After finishing grad school, I faced a difficult choice. I was a third-rate trombonist destined, at best, to win a seat in a third-rate orchestra and bag groceries on the side to make ends meet. Having never traveled, I decided to hit the road to give the matter some thought. I didn’t have any savings to speak of, so I jumped at an opportunity that arose to teach English in Tokyo. My idea was to do that for six months or a year and then move on when I’d saved some money. That was 47 years ago. I never moved on.
Learning Japanese proved enjoyable, and I was soon able to make a living as a translator. One thing led, as they say, to another. And work in translating copy machine manuals segued into work in translating investor presentations.
Having spent decades helping Japanese firms with IR, how do you compare the investor relations landscape in Japan with the U.S. markets? What do most foreigners not understand about Japanese business culture?
In short, shareholders have long been a lot lower on the totem pole here than they are in North America and Europe. I once worked for a fund manager at a European firm who had amassed a $1 billion stake in a Japanese company. The company’s market cap was way less than its book value. And my client was convinced that the company’s management team would be amazed at his proposal for redressing that differential. He was nonplussed when we couldn’t get him an interview with the president. The best we could do was get an hour with two low-level directors, who were polite but dismissive.
Things are changing, of course, as folks like KKR and Bain earn attention. Such firms have built solid operations on the ground here staffed with incredibly capable Japanese. They’ve been patient, they’ve done their homework, and they’ve put a lot of money into the market. Most important, they’ve generated results. Those results get them a serious listening of the kind that my client couldn’t get.
You played a key role in exposing the Olympus corporate scandal of 2011, supporting former CEO Michael Woodford after he was fired for raising fraud allegations. What did you learn from that experience?
My friend Michael Woodford became the first non-Japanese president of Olympus Corporation in 2011. Woodford’s keepers at Olympus presumably assumed that, as a non-speaker of Japanese, he would not get wise to the accounting fraud. They might have been right to the end but for an exposé in a little-known Japanese magazine and a friend who translated the article into English for Woodford to read.
The magazine, Facta, is a monthly gossip rag that specializes in corporate sleaze. A freelance reporter had learned of the accounting fraud at Olympus from a friend at the company. He wrote up the story and sold it to Facta, which published it on July 20, 2011, in its August issue. The story and the two follow-up stories in Facta by the reporter contained serious errors. But the revelations in the first story had been convincing enough to alarm Woodford.
The newly named president began asking questions of Olympus’s chairman and other executives and demanding answers. And when the answers proved evasive, Woodford took things into his own hands. He commissioned the auditing firm PwC to conduct an independent investigation. The interim findings of that investigation were sufficient to prompt Woodford to demand the resignation of the chairman.
In response to Woodford’s demand, the chairman convened an extraordinary meeting of the board on October 14, 2011. The chairman voiced a motion at the meeting to terminate Woodford as president. All the other directors present raised their hands in well-rehearsed approval of the motion.
Woodford’s termination in October was the beginning of a quixotic six-month quest to win reinstatement as president. I served as his interpreter and coordinated his media and investor relations during that half-year period.
Non-Japanese investors held a large minority of Olympus’s shares, and they were unanimously in favor of restoring Woodford to the presidency. Securing the support of just one or two of the larger Japanese shareholders would have been sufficient to prevail. Not one of the large Japanese shareholders turned away, however, from the fraudsters in charge at Olympus. And our bid for reinstatement failed to capture a majority at the extraordinary meeting of shareholders held in April 2012.
As an observer of the Japanese equity markets for nearly 40 years, who are some of the investors and operators you admire most? And what publications have you found are the best sources of information?
The opportunity to work with Kir Kahlon, of Scorpion Capital, was a tremendous learning experience and a great honor. Kir shook up the Japanese stock market spectacularly with his June 2024 short of the egregiously fraudulent Lasertec (TYO: 6920 – 1.57 trillion yen). That company’s flagship product line consists of extreme ultraviolet inspection equipment for semiconductor masks. And the Lasertec share had been Japan’s most actively traded stock on a monthly basis for about two years prior to the release of Kir’s report. Problem is, the equipment doesn’t work as advertised. And what the company billed as a cleanroom production and R&D facility in Yokohama was in fact a dusty storeroom in a Potemkin village.
The marvelous and thoroughly researched report from Kir’s Scorpion Capital is available for perusal at scorpioncapital.com. I encourage readers to have a look. The report nails the matter admirably in its header: “Japan’s Most Actively Traded Stock Is a Colossal Fraud and Ticking Time Bomb, Reminiscent of Olympus, Toshiba, and Other Infamous Accounting Scandals.” And it details its allegations convincingly across a 334-page slide presentation and a 53-page summary.
Sure enough, the share price fell after the release of the report. It reached a high of ¥40,100 on the day before report appeared on June 5, 2024. By April 9, 2025, it had sunk as low as ¥10,275. The share has recently clawed back some of its lost ground, but the company cannot defer indefinitely the reality detailed in Kir’s report. Stay tuned.
A nondisclosure agreement with Kir precludes me from describing my participation in the research in detail. My name appears, however, on the Japanese-language version of the report on the Scorpion Capital website as the translator and Japanese contact. And readers are free to speculate as to who might have taken the onsite photos and conducted the onsite interviews.
As for book recommendations, let me suggest Japanese Society, by the great social anthropologist Nakane Chie. It is the best introduction I know to its eponymous subject. James Abegglen’s Kaisha: the Japanese Corporation was a tremendously enlightening book when it appeared in the 1980s. But it and other business best-sellers have aged as Japanese society has evolved. Nakane’s classic, in contrast, remains a tremendously useful elucidation of how people interact in Japan. I strongly recommend it to anyone who will be doing business with the Japanese.