Corporate Governance Reform (3) －Private Placement－

◆Japan’s Ministry of Economy, Trade and Industry (METI), Financial Services Agency (FSA), and the Tokyo Stock Exchange (TSE) have set up investigative committees to examine the corporate governance of listed companies.

◆Decisions regarding private placement of new shares and stock warrants generally fall under the sole authority of boards of directors. However, some observers have pointed out a need for greater regulation, given that private placement can dilute the ownership of existing shareholders.

◆This report outlines private placement under existing legislation and discussions regarding its problems by the investigative committees.