Japan Tobacco Urged to Divest Drug Unit

LIM Advisors called on Japan Tobacco to divest its 53 percent stake in Torii Pharmaceutical Co. to boost shareholder value.

In a letter reviewed by Reuters, the Hong Kong-based activist fund said JT doesn’t have synergies with the drug unit or the expertise to manage its research and development. LIM plans to bring its proposal to the annual general meeting of shareholders in March.

The proposal by LIM, which holds less than 1 percent of Japan Tobacco shares, comes as Japanese regulators have frowned on so-called parent-child listings on the grounds that they can infringe on minority shareholder rights.

JT is one-third owned by the Japanese government.

LIM is also pushing for corporate charter amendments to improve governance, including a prohibition of Japan Tobacco executives retiring to take jobs at Torii.

Established in 1995 by investment fund veteran George Long, LIM has launched several governance motions in Japan in recent years.