The American Chamber of Commerce in Japan has issued a call for increased transparency in Japan’s currently unclear practices of proxy voting for foreign investors. ACCJ’s remarks, released in a statement in May, come amid an intense discussion in Japan and abroad about the perceived threat of hostile takeovers by U.S. investors and defence measures some Japanese companies want to introduce to block such takeovers.
But ACCJ said in the statement that takeover defences will only frighten away foreign direct investment, having negative affects on the Japanese economy. ACCJ insists foreign firms have not hostilely gained immediate control of any companies, and all mergers and acquisitions take place on a “friendly” basis.
The best way to avoid confusion and settle fears about sudden mergers and acquisitions, ACCJ said, is to increase the communication and transparency within the company and its shareholders.
ACCJ has said it supports the idea of Web-based proxy voting for US investors and encourages Japanese issuers and trust banks to take steps to get all proxy voting online.
“This supposed ‘huge threat of foreign takeovers’ is nonsense, an emotional myth,” said Debbie Howard, president of ACCJ, in the chamber’s statement. “We have no problem with the concept of takeover defences that increase corporate value, but we are concerned about the impact on Japan’s image in the international business and investment markets.”
Howard also called the “rush to blame” foreign direct investment a “scapegoat to justify new corporate defences enlarging managerial discretion.” She said Japan first must improve its laws assuring good corporate governance and transparent securities markets.