Despite votes of no-confidence from dissenting groups within Junichiro Koizumi's party, the Japanese Prime Minister is reportedly pushing through the sale of Japan Post, the world's largest savings institution. As controversy mounts, several fund management companies lie in wait to find out who will win the investment mandate, worth $3,000 billion.

According to Japanese press sources, Mr Koizumi aims to gain approval for the privatization of the postal system, which incorporates the world’s biggest bank, by August 13. The Prime Minister believes that private companies rather than bureaucrats should manage Japan Post, which has $3,000 billion of assets and is the nation’s largest postal distribution network.

Achieving postal privatization, which has been called a political miracle, can only be achieved with the support of the people, he told business leaders this week.

As the government pushes to enact the bill, it has also revealed that leading fund management companies will learn next month who will become the first to offer their investment products to the customers of Japan Post through its branches. The successful bidder will gain access to the $3,000 billion of assets, currently under Japan Post’s control. The mandate will also provide direct access Japan Post’s large customer base.

With 24,700 branches and annual bank deposits of $2,200 billion, Japan Post’s operations exceed those of Citibank, HSBC and Deutsche Bank combined.

According to reports in the Financial Times, from October, Japan Post will allow three outside fund management products to be sold at its branches: a Nikkei 225 tracker, a fund linked to the broader Topix index and a global balanced fund.

Japanese fund management companies apparently lead the race to manage the Nikkei 225 and Topix funds. However, a foreign asset manager is likely to be awarded the global balanced fund, with potential candidates for the mandate including US-based companies AIG and State Street.