Daiei Inc., the nation's largest retail chain, announced Wednesday that it has established a holding company to strengthen its financial condition, becoming the first company to take advantage of a change in the Antimonopoly Law.
The revision in the Antimonopoly Law, which cleared the Diet in June and took effect Wednesday, lifted a half-century ban on the establishment of holding companies. Holding companies were outlawed after World War II to prevent a resurgence of the prewar and wartime "zaibatsu" conglomerates that wielded huge financial and industrial influence.
Daiei Chairman and President Isao Nakauchi will become the president of Daiei Holding Corp., based in Kobe. The new company will be capitalized at 75.3 billion yen. At a news conference in Tokyo, Nakauchi said the group has often been criticized for a lack of transparency over transfer of stocks and capital among group companies.
"By transferring shares of the group companies to DHC, we'd like to increase our transparency and promote listing of group companies through giving greater independence to each group company," he said. Not all group companies will immediately go under the DHC umbrella.
By February, shares of 40 unlisted Daiei group companies will be transferred to DHC. Shares of other group companies that have already been listed or are scheduled to be listed in the near future, such as Lawson Inc., will be held by the parent company Daiei because subsidiaries of an unlisted company currently cannot be listed according to a rule by the Securities Dealers Association of Japan.
Daiei itself will stay outside the holding firm for the time being. At the initial stage, DHC will hold total assets of 350 billion yen, including 70 billion yen worth of Daiei's shares, 20 billion yen worth of DHC's shares and 190 billion yen of other group companies' shares.