JT to Buy its Own Shares Back from the Government

So, despite vastly under-performing when compared to global peers (see http://www.jtchange.com/JTChange/EconomicCase_Eng.aspx) particularly when it comes to returning profits to shareholders, JT suddenly has money to buy its own shares…. from the Japanese government.

This seems like a transparent effort by the company (and the Ministry of Finance) to give in to the political pressure to sell off national assets to meet current fiscal requirements while at the still time ensuring that JT remains in control of the MOF. Or am I being too cynical? (from the Japan Times/Kyodo http://www.japantimes.co.jp/text/nn20120520b5.html) Sunday, May 20, 2012 Ministry to sell chunk of JT shares Kyodo The Finance Ministry will sell part of the government's stake in Japan Tobacco Inc. this year to raise more than ¥500 billion to finance reconstruction from the March 2011 earthquake and tsunami. The ministry said Friday it expects to sell one-sixth of the tobacco company's outstanding shares in fiscal 2012 ending next March. The government, which now holds half of JT's outstanding shares, has decided to reduce the amount to a little more than one-third. The government will first offer to sell the stock back to JT, which has expressed its intention to purchase at least around ¥200 billion worth, while the remainder will be sold on the market. The sale is expected to begin as early as the fall but could be delayed until fiscal 2013 depending on market conditions, officials said.

The Board Director Training Institute (BDTI) is a "public interest" nonprofit in Japan dedicated to training about directorship, corporate governance, and related management techniques. It is certified by the Japanese government to conduct these activities as a regulated nonprofit. Read a summary about BDTI here, and see a menu of its services for both corporations and investors here.

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