One wonders how many directors at the large subsdiaries of Japaneseholding companies are aware of their potential liability from this direction.
An amendment to the Companies Act was enacted on 20 June 2014 (Amendment) and is expected to come into effect on 1 April 2015. This briefing will focus on the amendments relating to parent and subsidiary companies. A new cause of action called the shareholders’ double-derivative suit will be introduced. This new cause of action will allow shareholders holding 1% or more of outstanding shares in a parent company to bring an action against directors of its significant subsidiaries for any breach of directors’ duties. It is expected that an additional category of potential claims will encourage directors to exercise their directors’ duties with even greater diligence.
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