Some Japanese companies will now pay dividends without needing the approval of the shareholders’ AGM. Following the implementation this month of the so-called Company-with-Committees system, Japanese agent banks are predicting an acceleration in the payment of dividends.
“The prevailing schedule in the current market is that companies hold the annual shareholders meeting within three months after the record date and pay the dividend on the next day of the meeting,” explains a spokesman for Bank of Tokyo Mitsubishi (BTM) in Tokyo. “As for the companies with record date at the end of March, for example, the dividends are mostly paid in late June.”
The Company-with-Committees system was introduced from 1 April 2003. A company that has adopted it by changing its own Articles of Association can then agree t pay a dividend at Board level only. Approval by the shareholders’ meeting is not required, making it possible to pay the dividend before the AGM is held in June.
“It is expected that the number of the companies with the committees system will increase which bring forward the dividend payment,” says the BTM spokesman.
Japanese companies do not at present announce a payment date. I effect, information providers such as Tokyo Stock Exchange indicate the next business day of the annual shareholders meeting as ‘payment date’.