Japanese policymakers may have found the one thing that can force executives to simplify their arcane capital structures — threatening their status in the elite grouping of the nation's top firms.
With just months to go until a key deadline in the Tokyo Stock Exchange’s once-in-a-generation makeover, companies are being forced to divest stakes, unwind tie-ups or cancel treasury stock to ensure that they remain among the country’s elite listed firms.
The process has been triggered by the reorganization of the Tokyo bourse, in which the bloated First Section will be replaced by a trimmer Prime segment. One requirement to make it into the new section is for firms to have a certain percentage of shares that freely trade — not locked up in cross-shareholdings or held by long-term business partners.