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K's Holdings unloads stake in PC Depot

TOKYO -- Japanese electronics retailer K's Holdings has sold off all the shares it held in compatriot PC Depot as part of an unwinding of cross-shareholdings.

K's owned 1.97% of PC Depot as of March 31, making it the eighth-largest shareholder, according to a securities report. The shares were sold by the end of August.

In 1999, K's signed a franchise agreement to operate PC Depot stores selling personal computers. It increased its stake in PC Depot in September 2010, becoming the second-largest shareholder.

Following Japan's introduction last year of a corporate governance code that requires companies to disclose and justify their cross-shareholdings, K's decided to unload all such shares. Cross-shareholdings, which are common in Japan, have been criticized as leading to cozy relationships between business partners.

PC Depot has been facing a firestorm since the middle of last month for charging elderly customers large fees for canceling membership. A K's official said the company has been working on the stock sale since last year, denying that the move has anything to do with the recent controversy. K's told PC Depot about the plan to sell the shares at the end of last year, according to the official.

K's no longer runs any PC Depot stores. Meanwhile, PC Depot intends to hold onto its K's shares.

(Nikkei)

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