Key facts
- Japan's ruling party is proposing to raise the ownership threshold for shareholders to request special meetings from 3% to 5%.
- The government is also considering unifying the requirement for submitting shareholder proposals to 1% or more of total voting rights.
- These measures are intended to curb the influence of activist investors and address concerns about collusion with private equity firms.
- The proposals aim to enhance corporate value and legal fairness in capital markets.
- The Japan Private Equity Association declined to comment on the proposals.
Japan's ruling Liberal Democratic Party has raised concerns over suspected collusion between activist investors and private equity funds in take-private deals, warning that such arrangements could undermine fairness in capital markets. In draft policy proposals, the party's project team on corporate governance suggested raising the ownership threshold for shareholders to request special meetings from the current 3% to 5%. The proposals also aim to tighten criteria for submitting shareholder proposals and restrict appraisal-rights claims by investors who purchased shares after an M&A deal was announced. These measures are seen as a response to increasing pressure from activist investors on Japanese companies, with private equity deals in Japan jumping significantly last year. The proposals did not cite specific cases of alleged collusion but highlighted concerns from the perspectives of enhancing corporate value and legal fairness.