Japan Mulling Enabling Firms to Check De Facto Shareholders

   Tokyo, Feb. 12 (Jiji Press)--Japan is considering introducing a system that enables publicly traded and other stock companies to identify de facto shareholders who do not appear in shareholder lists but effectively exercise voting rights.
   The system will be included in a draft revision to the companies law being discussed by the Legislative Council, which advises the justice minister. Specifically, the council is likely to approve the idea of giving companies the right to demand that the shareholders through whom de facto holders exercise their influence disclose information on them.
   The system is aimed at promoting dialogue between corporations and shareholders as activist investors in and outside Japan exert increasing sway over listed companies.
   De facto shareholders, known as beneficial shareholders, do not appear in shareholder lists compiled by companies but effectively hold shares in companies through trust banks and exercise voting rights. The lists display only the names of trust banks and other nominal shareholders, making it difficult for companies to identify their de facto owners.
   Although shareholders are required to submit a large-volume shareholding report if they own more than 5 pct in a listed company, it is difficult for companies to identify holders of up to 5 pct, leading to the risk of many shares being bought without their knowledge.

(2025/02/12-12:20)

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