The standards of Japanese corporate governance are likely to be severely tested by the actions of one activist hedge fund, it has been claimed.
SFP Value Realization Fund is the largest shareholder in one of Japan's oldest department stores, Matsuya. The fund is trying to change the internal "poison pill" regulation that prevents a hostile takeover, according to the Financial Times.
Matsuya's poison pill allows it to dilute the holding of any investor who seeks to purchase more than a 20 per cent stake by creating common shares and issuing them to other shareholders.
The FT claims that the adoption of poison pill regulations and other indicators of poor corporate governance have prevented many serious investors from engaging with Japanese companies.
Jamie Allen, secretary-general of the Asian Corporate Governance Association, told the publication that this issue has "been a big aggravation for shareholders".
Earlier this month, it was announced that a lack of investor confidence in Japanese corporate governance had moved Nomura to become the country's first major bank to appoint foreign directors.
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The standards of Japanese corporate governance are likely to be severely tested by the actions of one activist hedge fund, it has been claimed.
