JAPAN Trends and Developments Contributed by: Yoshitaka Sakamoto, Tsunemichi Nakano, Michi Yamagami and Hideo Tsukamoto, Anderson Mori & Tomotsune
of shares in which such beneficial shareholder holds the authority? Opinions expressed at the deliberation support - ed the view that the scope of information is suf - ficient if it covers: (A) (i) the full name of the indi - vidual or name of the entity, and (ii) address and other contact information; and (B) the number of shares in which the beneficial shareholder holds the authority. There were no opinions requesting to add any other information. • Disclosure of provided information – in light of the purpose of the system, allowing for stock companies to identify information on their beneficial shareholders should be sufficient, so is it necessary to disclose the information to other shareholders or to the public? Many opinions expressed at the deliberation agreed that allowing for stock companies to identify information on their beneficial share - holders should be sufficient, and it was point - ed out that disclosing such information could cause violent fluctuation of stock prices or other unnecessary confusion in the market. • Sanctions for failure to provide information – in addition to civil fines, should restrictions be imposed on the exercise of voting rights, and if so, how should such restrictions be imposed? This was the most intensely debated issue at the deliberation, and diverse opinions were expressed. From the perspective of ensuring effectiveness, several opinions expressed that civil fines alone are weak and insufficient as a sanction and that restrictions on the exercise of voting rights are necessary. On the other hand, concerns were raised for Proposal B that impos - ing restrictions on the exercise of voting rights
could lead to legal instability, such as the pos - sibility of grounds for rescinding the resolution of the shareholders’ meeting being found. In par - ticular, opinions regarding Proposal B-2 pointed out that: the requirement of “if it is deemed to significantly undermine the common interests of shareholders” is too abstract and thus even more unstable; the requirement is too stringent; and the framework “allowing” for the stock com - pany to restrict the exercise of voting rights is problematic in the sense that it could permit arbitrary treatment by the company. It was also pointed out that, regarding the restrictions on the exercise of voting rights, it is appropriate to require judicial review as a condition for sus - pending voting rights. Additionally, as to civil fines, it was noted that while a civil fine seems sufficient if premised solely on the purpose of the system, that is, to promote dialogue between companies and their shareholders, imposing a civil fine on an individual shareholder would be unprecedented. Trends in Acquisitions Without Consent The Guidelines were formulated with the pur - pose of presenting principles and best practices that should be shared throughout the economy to develop fair rules regarding M&A transac - tions, and includes acquisitions without consent within their scope. According to the Guidelines, generally, upon receiving a proposal containing a specific acquisition offer that seeks to gain control over the management of a company, including an offer of acquisition without consent, the offer must be submitted to the target com - pany’s board of directors for deliberation, and the directors and the board of directors (includ - ing, if applicable, the special committee estab - lished by the target company) should determine whether the acquisition proposal will increase the company’s corporate value, and make rea - sonable efforts to ensure that the acquisition is
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