B-CAS Inc. Is Illegal

The Asahi Shimbun, Japan's leading daily, reported that B-CAS Inc., a joint venture of major Japanese broadcasters that distributes the B-CAS cards. According to the report, B-CAS Inc. has never disclosed their P/L and B/S since it was established in 2000. It's illegal and could be punished.

B-CAS Inc. admitted their misconduct and disclosed the financial statements for the first time. It's strange that the cost of the card - very simple IC card that contains only a cypher key - is sold to electronic manufacturers with $6 and its cost is more than $5 apiece. Experts say the card costs around $1 when they are produced more than 44 million pieces. The cards might be bought at higher prices from their shareholder's subsidiary to transfer the profit - as is often the case in Japan.

The report is striking because the Asahi Shimbun is the parent company of TV Asahi, a shareholder of B-CAS Inc. It might be the beginning of demise of B-CAS, which the government wants to abolish for the DTV transition. Japanese FTC is also interested in this company, which is a great barrier of entry by domestic and foreign companies.