Japan Digital Contents Trust (JDC) the film and content fund management firm, has been ordered to reform its business practices by Japan’s financial services agency (FSA).
The FSA has requested JDC to outline new business strategies to increase its assets and regain profitability. If it is unable to meet requirements it may be forced to suspend business and have its license revoked.
As of the end of March, JDC held net assets of $500,000 (Y47m), down from $4.11m the year before and well below the $1.06m (Y1b) the trust business act requires. Its share price has fallen over 60% over the past year amid news that the company had been investigated in the past for questionable business transactions.
Established in 1998 and floating on the Tokyo stock exchange in 2000, JDC began with funds for animation and game contents. It expanded into feature films through two funds in 2005.
Underwritten titles for the have included Shunji Iwai-produced high school drama Halfway, released this February, and 2008 WWII baseball drama Last Game. Both were produced and distributed by Cine Qua Non. Kadokawa’s Kung Fu Kid and Katsuhiro Otomo’s Bugmaster were also financed by JDC.
Cine Qua Non-produced Musical drama Hula Girls, released in 2006, was one notable success, earning $14.87m (Y1.4b) and yielding approximately 15% return on investment. However, none of the projects funded since have been box office successes, contributing to JDC’s current financial strife.
As reported by ScreenDaily in November, Singapore-based investment firm JCM Singapore Pte Ltd purchased a 51.11% majority share in JDC. Toyota and Deutsche Bank are also shareholders.
With unsatisfactory returns on funds and only recent interest in completion bond financing in the territory, most films continue to be financed through production consortiums.