TOKYO May 21 The Children's Investment Fund (TCI) has urged Japanese Prime Minister Shinzo Abe to fully and swiftly privatise Japan Tobacco Inc by shedding the government's one-third stake.
The British-based activist fund's renewed call for boosting shareholder returns comes as Abe prepares to outline plans next month to improve corporate governance, as part of an updated economic strategy aimed at overturning Japan's reputation for neglecting shareholders.
In a letter to Abe dated May 20, TCI noted that privatisation would bring over 2 trillion yen ($19.7 billion) in revenues for the government. Last year, Japan sold about a 17 percent stake, raising nearly 1 trillion yen to fund reconstruction of areas devastated by the 2011 earthquake and tsunami.
"We now strongly recommend that the government immediately fully privatise JT, as it is not of strategic importance for the country," it said.
TCI, which holds slightly more than 1 percent of JT, according to Thomson Reuters data, also urged Abe to vote in favour of its proposal for the company to buy back 10 percent of its outstanding shares. JT will hold its annual shareholders meeting next month.
Shares in Japan Tobacco were roughly flat on Wednesday morning, mirroring the broader Tokyo market.
($1 = 101.3450 Japanese Yen) (Reporting by Chang-Ran Kim; Editing by Stephen Coates)