Engagement with Japan Ministry of Finance (MOF)
In 2019, Japan proposed an amendment to their Foreign Exchange and Foreign Trade Act (FEFTA) that requires prior-notification by foreign investors intending to acquire 1% or more of shares in listed companies in sectors such as aircraft, electricity/gas, communications (and many more). This is down from the current 10% or more requirement. It also requires prior – notification by foreign investors intending to influence management on governance or business strategy. We were concerned that the amendment could:
- Impact foreign investment into Japan
- Increase complexity and administrative costs of investing in Japan.
- Valuations and market liquidity could be negatively affected.
- The countries improving corporate governance could slow if pre-notification is required for influencing management on governance or strategy.
Ninety One took the following action:
We wrote to the Ministry of Finance (MOF) listing our concerns and requesting a careful review of the proposed amendments prior to implementation,
Shared our letter and concerns with the Asian Corporate Governance Network (ACGN) and encouraged action.
Shared our letter and concerns with the International Corporate Governance Network (ICGN) and encouraged action.
COP25 – we co-signed a letter to governments on climate change
As a member of the Institutional Investor Group on Climate Change (IIGCC) we co-signed a letter to governments (along with 630 other investors) to encourage stronger and faster action on achieving the goals of the Paris Agreement.
Emerging Market Sovereign Debt
Our Emerging Market Sovereign Debt directly discuss difficult issues with government- and central bank officials. During these discussions, our portfolio managers will voice their concerns or opinions directly to people who have the capacity to make meaningful changes, particularly in relation to controversial weapons or governance issues and unsustainable environmental practices. This is an extremely fortunate position to have and we do not take it lightly.