Japan aims to bolster M&A disclosure after Olympus scandal

Fri Dec 16, 2011 5:24am EST
 
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By Noriyuki Hirata

TOKYO (Reuters) - Japan signaled plans to strengthen disclosure rules on mergers and acquisitions after a $1.7 billion accounting fraud at Olympus Corp, one of the nation's worst corporate scandals, which involved a series of shady deals.

Financial Services Minister Shozaburo Jimi told reporters that Japan's financial regulator and the Tokyo Stock Exchange would both look for ways of improving disclosure on M&A deals.

"As the resolution of this (Olympus) case proceeds, there is a need to check the workings of the system and discuss policies to prevent a recurrence," Jimi told reporters.

Jimi declined to give specifics, saying these had yet to be worked through. He did not give a timeframe.

Japan's regulator will consider requiring that firms disclose fees paid to advisers and information on acquisition targets, although it will likely look to set thresholds for disclosure based on the size of the deal, two sources familiar with the matter said.

"If you are too stringent, if you require everything to be disclosed, there is a risk that it could discourage M&A," said one of the sources, who was not authorized to speak publicly about the matter.

Setting strong disclosure rules could set a precedent for Asia.

In the United States, companies often detail M&A transaction details. But it is rare to get such publicly available information in Asia.   Continued...