Two of Japan’s largest banks, Mitsubishi UFJ Financial Group (MUFG) and Sumitomo Mitsui Financial Group (SMFG), are reportedly planning to sell a combined $8.5 billion worth of shares in Toyota Motor. This move comes amid ongoing corporate governance reforms in Japan that aim to reduce cross-shareholdings between companies.
MUFG and SMFG have confirmed their intention to gradually sell down their holdings in Toyota over time. This shift reflects pressure from the government and the Tokyo Stock Exchange to promote transparency and accountability within Japanese corporations.
Traditionally, cross-shareholdings were used by Japanese companies to solidify business ties. However, critics argue that this practice weakens corporate governance by shielding management from external scrutiny.
The banks reportedly plan to sell their Toyota shares over several years, potentially through the automaker’s planned share buyback program. While Toyota’s stock price dipped upon the news, the banks’ shares remained relatively unaffected.