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ASIA
NOVEMBER 9, 1998 VOL. 152 NO. 18


In those days, LTCB was a prestigious place to be. If Japan's other long-term lender, the Industrial Bank of Japan, was the top choice of university graduates entering the banking world, LTCB was a close second, according to Hiroshi Takeuchi, a former LTCB banker. This was not a place for entrepreneurial daredevils. It was the creature of a quasi-socialist financial system where bankers followed blueprints drawn up by an army of bureaucrats, who didn't trust the markets to supply companies with needed capital. "We always had the sense we were working for the good of the state," says Takeuchi. "LTCB maintained that attitude right up to the end."

By the 1970s, however, the bank had already begun to outlive its usefulness. Companies were bypassing the banks and raising money directly in the financial markets. LTCB started casting around for a new purpose. But the Industrial Bank of Japan, around since the turn of the century, had a lock on the best blue-chip customers. The commercial banks occupied the small-business niche. Desperate for new clients by the mid-1980s, LTCB started eyeing the real-estate market.

The foray into property lending marked a dramatic break with LTCB's staid corporate culture. In the view of most bankers, land developers were rough types with uncouth manners and loud clothes. So the bank's men were elated when they crossed paths with Takahashi, the head of a small electronics firm with a flair for real estate. Young and dynamic, Takahashi was a graduate of prestigious Keio University, as were some of LTCB's bankers. Descended from a family that once ruled Nagasaki prefecture, he counted a prewar Prime Minister among his ancestors. In short, he was a man the bankers thought they could trust.

His timing was impeccable. As interest rates dropped, the land and stock bubble was starting to inflate. Soon LTCB and other banks would have more money than they knew what to do with. Takahashi had just cut an innovative deal to buy a Hyatt hotel in Saipan, and that caught the attention of the bankers at LTCB, says his former adviser and top dealmaker, Bungo Ishizaki.

Ishizaki soon saw for himself what the tycoon was capable of when the two went to Sydney to purchase another Hyatt hotel. The day after their arrival, the pair hired a car and driver to show them around. As they waited at a traffic light, Takahashi suddenly gestured across the waterfront to the Regent Sydney Hotel. He demanded to be driven there immediately. After a quick glance at the lobby, Ishizaki recalls, Takahashi said: "We're going to buy this hotel." Takahashi had a rare knack for choosing properties, says the former adviser, and the bankers saw this early on. "He was a good picker of the horses," says Ishizaki. "They couldn't shove money into his pockets fast enough."

LTCB and its affiliates kept shoveling. By his own account, loans to Takahashi and his companies totaled $5 billion by the end of the decade. Takahashi assembled an empire that stretched from resort developments on Australia's Gold Coast to the I.M. Pei-designed Regent Hotel in Manhattan, now the Four Seasons. While he may have lacked the patience for paperwork, he made up for it in nerve. In the late 1980s, Ishizaki recalls, Takahashi flew unannounced into Vietnam on a private Boeing 737--complete with karaoke facilities, movie-screening room and on-board chef--and sold Ho Chi Minh City its first international-standard hotel. Using cases of French wine and Dom Perignon to smooth his way, he promised to build a luxury hotel in less than six months. Vietnamese officials were skeptical, but Takahashi made good on his promise by shipping in a floating hotel and mooring it off Ho Chi Minh City. He once even flew most of the Cabinet of Fiji to Tokyo to drum up investment for his interests in the Pacific island nation, remembers Ishizaki.

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