Japan Tobacco Shareholder Urges Sale of Pharmaceutical Company

Feb.01.2023
Japan Tobacco Shareholder Urges Sale of Pharmaceutical Company
Japan Tobacco's shareholder demands sale of Torii Pharmaceutical Co to boost shareholder value. LIM Advisors proposes a 53% stake sale.

Recently, tobacco company shareholders in Japan have called for the sale of their publicly listed pharmaceutical subsidiary, Torii Pharmaceutical Co, in order to boost performance and shareholder value.


LIM Advisors, a radical fund based in Hong Kong, has called on Japan Tobacco to divest 53% of its stake in a pharmaceutical company known for its anti-allergy products in a letter reviewed by Reuters. The fund is urging Japan Tobacco to use the proceeds to launch a ¥250bn ($1.94bn) share buyback.


In the letter, it was stated that there was no collaboration between the tobacco division of Japan and the pharmaceutical department, and there was no management of their professional knowledge regarding its development. LIM plans to submit their proposal at the annual shareholder meeting in March.


The Japan Tobacco Inc. has acknowledged receiving the proposal but stated that it cannot provide further details regarding the letter's content. Japan Tobacco told Reuters, "We are currently reviewing the contents and legal matters.


LIM declined to comment.


LIM Company holds less than 1% of shares in Japan Tobacco Inc. Their proposal is in response to Japanese regulatory authorities' disregard for the practice known as "parent-subsidiary listings", citing concerns that such practices may infringe upon the rights of small shareholders.


LIM is still pushing for the revision of the company bylaws to improve governance, including prohibiting executive retirees from Japan Tobacco from taking up positions in Torii Company, which is a type of golden parachute arrangement known as "amakudari".



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