Cross shareholdings is back

Nowadays, in Japan, listed companies’ cross shareholdings is back.

According to Nihon Keizaishinbun, the purpose of this cross shareholdings is not to avoid takeover but to strengthen  the relationship to corporate clients.

A few years ago, some listed companies began to hold shares each other again for takeover defense.

But cross shareholdings is bad custom from the viewpoint of corporate governance because cross shareholders are never opposed.

So, the moves are criticized by other shareholders. 

A few 7-eleven owners formed a labor union

Aug 4, a few 7-eleven’s franchise owners formed a labor union and expressed their wish to bargain collectively with 7-eleven Japan about pricing and rate of royalties.

The number of the owners is 230. 7-eleven Japan’s stores are over 12000.

7-eleven Japan says franchise owner is not worker and their “labor union” is not legal labor  union.

In Japan franchise law does not exist. The owners insists on acts protecting franchise owners.

7-Eleven to accept JFTC’s order

July 28, according to Nihon Keizai Shinbun, Seven-Eleven Japan is set to accept JFTC’s order to cease discount banning and allow its franchise stores sell food products close to their expiry at discount prices.

Seven-Eleven is biggest convenience store in Japan, so the decision will affect rivals.

Hitachi to plan to buyout minority shareholders in listed units

July 27, according to broadcasting, Hitachi plans to buyout minority shareholders in five listed subsidiaries.

In Japan, listed parent-subsidiaries are practice and  Hitachi is not an exception. Hitachi has 16 listed subsidiaries.

The practice is criticized because it means lax corporate governance.

Hitachi is one of the biggest traditional Japanese company, so the plan could influence other Japanese company to follow.

Singaporean fund “Effissimo” sued Nissan Shatai to stop loans to a controlling company

Singaporean investment fund Effissimo Capital Management Pte. has filed a legal complaint against Nissan Shatai Co. which is Nissan Motor Co. group firm and loans to group firms with low interest.

Effissimo is major shareholder of Nissan Shatai.

In Japan, to list controlled company is not uncommon, so it is said that minor shareholders’ interest are deprived by controlling company in such listed controlled company.

It seems that Effissimo’s sue is revolt of minor shareholders.

Honda won trademark suit in China

July 10(JST), Honda Motor Co. won major Chinese motorcycle maker Chongqing Lifan Industry Group Co. in Beijing district court.

Chinese firm’s trademark is “Hongda”.

The pronunciation of  “Hongda” is almost the same to “Honda”.

But Kanji character of Hongda is completely different.

So Chinese government committee had rejected Honda’s claim.

The court acknowledged that Hongda is confusing  with emphasizing the similarity of pronunciation.

Labor union’s veto over company split

In Japan, according to Companies Act and Act on the Succession to Labor Contracts upon Company Split, companies may effect company split without the agreement of labors who will be transferred.

Sotetsu is one of major railway company and their management is in crisis, so they are planning to effect company split which means railway business will be divided.

But Sotetsu Labor Union, one of labor union of Sotetsu, insists that they have a veto power over company split and plans to strike.

Basis of their claims is union contract.

Union contract between Sotetsu and Sotetsu labor union has prior consultation clause which demand company to have a discussion when company plans to change working condition.

The union’s claim seems unreasonable because prior consultation clause does not mean veto power. It only demands to have a discussion.