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Japan to curb conflicts of interest in parent-subsidiary listings

Foreign investors worry about risks to minority shareholders

Publicly traded SoftBank Group listed its mobile communications unit SoftBank Corp. in December.   © Reuters

TOKYO -- Japan will create new guidelines to prevent conflicts of interest between publicly traded parent companies and their listed subsidiaries -- a dynamic more common in corporate Japan than elsewhere -- in response to strong criticism from foreign investors.

Leading proposals call for at least half or a third of the boards of listed units to consist of outside directors independent of the parent. The government is also considering requiring parent companies to explain their reasoning for listing subsidiaries.

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