About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

27 Law Japan 27 (2001)
T. Boone Pickens and Corporate Governance in Japan: A Retrospective View of Three Sides of the Story and Recent Developments

handle is hein.journals/lij27 and id is 37 raw text is: VOLUME 27:27, 2001 T. Boone Pickens and Corporate Governance in Japan: A Retrospective View of Three Sides of the Story and Recent Developments PAULINE C. REICH I. Introduction It is often said that there are three sides to a story: my side, your side, and the truth. Eight years ago, an incident arose in Japan in which T. Boone Pickens, an American investor, attempted to gain seats on the board of directors of Koito Manufacturing Company, a member of the same keiretsu as Toyota. The company was an industry leader in automotive lighting. It had a debt-free balance sheet and an established track record of successful products. Its stock sold at a hefty 210 times earnings. Most of its sales were in Japan, with Toyota accounting for 45% of its revenues.' When rebuffed by the Japanese company, Pickens did what works in the United States: he obtained maximum press coverage, filed a lawsuit in Japan and filed complaints with various American administrative and legislative bodies. What works in the U.S. didn't work in Japan, however, and ultimately, he folded his tent and gave up on Japan. After his defeat, he returned to the United States to give testimony to Congress, citing Japan's keiretsu system as one reason for his downfall. Among the allegations was one that Toyota, as the keiretsu parent, dictates the pricing policies of Koito, and as a result Toyota obtains preferred prices. This system gives Toyota hidden dividends, to the exclusion of the other shareholders. As Koito's largest shareholder, this is where I become directly involved.2 In that way, Pickens continued to carry on a battle begun in court in Japan in U.S. government circles. He had previously presented himself in the United States as the champion of the rights of small shareholders by challenging America's fat-cat management class. While on the surface it appeared that his challenge to corporate Japan was more of the same healthy American desire to Notes: Ms. Pauline C. Reich is Associate Professor, Waseda University School of Law, Tokyo and a member of the bar of the State of New jersey, U.S.A. The author is currently Vice Chair of the International Legal Education Committee of the American Bar Association Section of International Law and Practice and Chair of the Asia Pacific Subcommittee of the American Bar Association Section of Dispute Resolution. She acknowledges the assistance of Associate Dean Kawabe, Waseda University School of Commerce and students Masayo Terakado and Shin Okubo in developing the chronology of events described herein. 'Mark Ivey and Ted Holden, Boone Pickens, Samurai Warrior, BUSINESS WEEK 94 (May 8, 1989). 2Testimony of T. Boone Pickens, House of Representatives, Subcommittee on Economic and Commercial Law, Committee on the Judiciary, May 3, 1990 alleging that Japanese companies were violating U.S. antitrust principles, and that the Japanese corporate system rewards incumbent managers and related customers rather than shareholders, as seen in the relationship between Koito and Toyota.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most