The head of the Tokyo Stock Exchange defends Japan’s efforts to regulate corporations

The head of the Tokyo Stock Exchange has defended Japan’s actions in terms of corporate governance in the wake of Toshiba’s record-breaking scandal, denying that stock market improvements next year have been sharply reduced.

Hiromi Yamaji, who was elected TSE chief in April, told the Financial Times that investors should not judge Japan and the melting of the boardroom in Toshiba, calling the problem a “private matter”.

His comments came as the TSE was preparing a remodeling which will dominate the “first” and “second” segments of the main theme, along with Jasdaq and Mother’s markets for small and medium-sized enterprises.

“We have tried to change what is best for everyone working in the markets,” Yamaji said. “We are not doing this for foreign exchange, but we want to fix the complexity of the Topix index as a way to monetize and restructure market segments based on the right assumptions.”

The new categories are called “Prime”, “Standard” and “Growth”.

Yamaji’s comments echo the sentiments of the Japanese company’s re-emergence of change and the extent to which foreign investors have questioned the country’s commitment to change leadership since Yoshihide Suga became Prime Minister in September.

In a statement issued in June at the American Chamber of Commerce in Japan, Satoshi Ikeda, chief financial officer at the Financial Services Agency, described such a change in legislation as “extremely hated by corporate executives”.

The main objective of the doubts of investors has been to improve the distribution of listed shares in Tokyo. Previous plans have encouraged companies to relinquish their shares and to promote their right to self-determination, which means they are considered to have higher standards of governance and greater potential for growth. Membership depends on the free market share except for the shares they own at the border.

The reality, they say, is that the changes have been watered down so as to force a slight change in corporate performance.

Masatoshi Kikuchi, head of marketing at Mizuho, ​​said although some companies may be striving to meet the needs of the Prime Market market, many people feel that the TSE rejig will not encourage the transformation of governments that many investors think is important.

“Demand for the Prime Minister’s market has been downgraded in the initial plans due to opposition from small or regional companies,” Kikuchi said.

Yamaji defended the change, saying the reforms should be considered in conjunction with the country’s recent changes. company rules. “Obviously, Japan’s regulatory agencies are making progress but obviously it is not yet perfect,” he said. “Most companies are planning to negotiate with investors.”

However, researchers have warned that leadership growth over the past six years could be severely hampered by an independent inquiry into Toshiba’s consensus with the Japanese government to crack down on fundraisers ahead of last year’s summit.

“I think Toshiba’s case is unique,” Yamaji said. “I don’t think it’s fair to say that this is evidence that Japanese corporations are not doing well.”

Bad luck for companies like Wirecard is happening all over the world, says Yamaji, but he stressed that what is happening in Toshiba was unusual especially at the end of its operation.

The industrial crisis began in 2015 with the advent of economic fraud and Toshiba was on the verge of collapse two years after his US nuclear business collapsed. The sudden release of $ 5.4bn per share in 2017 filled its share of subscriptions with foreign freedom fighters, sparking controversy with those who suspended it that led to the removal of their chairperson.