Voting at shareholder meetings in Japan may become more consequential if the decision by Japanese megabanks to divest their strategic holdings in Toyota Motor triggers a broader unwinding of cross-held shares among the country’s biggest companies.
Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group will start selling ¥1.32 trillion ($8.5 billion) of stock in the world’s No. 1 carmaker, people with knowledge of the matter said. Insurance firms, which have already indicated that they plan to cut their holdings to zero, may also follow suit.
The potential exit of key stakeholders may lead to less stability and predictability for boards and management of listed companies across Japan, and inject more drama into mostly procedural annual meetings. The government has been pushing for a broader unwinding of cross shareholdings that cemented business relationships for decades in order to improve corporate governance and bring more dynamism into the corporate sector.
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