Two of Japan’s biggest banks look to withdraw their investments in Toyota

view original post

Two of Japan’s largest banks are to begin offloading their strategic shareholdings in Toyota Motor, according to a report by Bloomberg News.

Citing sources close to the matter, Bloomberg states that Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group will start divesting ¥1.32trn (circa $8.4bn/£6.6bn) worth of strategic shareholdings in Toyota Motor Corp over the next few years.

Although the move could be viewed as a cooling of support from some of Japan’s largest businesses, the unwinding of the shareholdings is more likely a result of corporate governance reforms in the country, which has changed its stance on the practice of cross-shareholdings cementing business ties.

More recently, the Japanese government has seen the practice as a way to shield management from activist or hostile shareholders, according to Reuters.

Representatives for Mitsubishi UFJ, Sumitomo Mitsui and Toyota have so far failed to comment on the matter, although Toyota, Japan’s largest automaker, said last month it planned to buy back up to 410m shares worth ¥1trn ($6.4bn/£5.03bn) by the end of April 2025.

It also follows the news that Toyota lost over $15bn (£11.8bn) in market value last week after being caught falsifying tests, where Japan’s transport ministry found incorrect data was being used to certify certain models.

Mazda‘s share price dropped by 7.7% as news of the scandal broke on June 3, as CNBC reported that the inspection carried out by the Ministry of Land, Infrastructure, Transport and Tourism also found irregularities in certification applications by Honda, Suzuki and Yamaha.

As a result, Toyota chairman Akio Toyoda publicly apologised to the company’s customers and stakeholders during a press conference last week.