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For years, activist investors of the foreign variety were about as welcome in Japan as Commodore Perry’s gunboats a century and a half earlier. Indeed, any attempt from outside to change Japan’s rather sclerotic corporate culture was treated as a national security threat, as Chris Hohn will unhappily tell you.

Then, at last, an opening: Among the many reforms promised by Prime Minister Shinzo Abe was that of corporate governance, the sort of thing that people like Paul Singer view as an open invitation. After all, in the wake of the whole ongoing SoftBank catastrophe, it was pretty much the least he could do.

Well, Abe’s now gone, struck down not by an angry American but a debilitating bowl injury, and as it turns out it wasn’t the least he could do vis-à-vis corporate governance. The least he could do was nothing, which is exactly what’s changed in Japan’s approach to activist investors from abroad.

Representatives of the powerful Ministry of Economy, Trade and Industry (METI) called at least three funds ahead of the meeting to inquire if they had collaborated with other investors, two of the people said.

The ministry was particularly focused on whether the funds collaborated with Toshiba’s top shareholder, Effissimo Capital Management, communication that could violate rules preventing shareholders from “acting in concert”, the two people said….

METI used a similar approach with several foreign shareholders last year, when U.S. hedge fund King Street Capital Management sought to replace a majority of the Toshiba board, according to one of the sources and another person.

Japan government contacted Toshiba shareholders before AGM – sources [Reuters]



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