VIEWPOINTS : Pickens’ Argument May Be Honorable : Some in Japan Feel There Is a Lesson to Be Learned

A merican corporate raider T. Boone Pickens Jr. has waged a high-profile battle against what he regards as the insularity of Japan’s business community. As part of that effort, he has acquired stock in Koito Manufacturing and has tried, so far unsuccessfully, to gain seats on the board of the auto parts firm. He suggests that he has been denied the board seats because he is not Japanese. For another perspective on Pickens’ efforts, here are some excerpts from the Japanese press:

Article in the Japan Economic Journal, July 8:

“T. Boone Pickens easily won the attention of the Japanese press last week when he was in Tokyo for Koito Manufacturing Co.’s June 29 shareholders’ meeting. But by all accounts, he has about as much chance of winning in his bid to put himself and two associates on the Koito board as a rattlesnake has of befriending a barefoot cowboy.

“One reason why many Japanese observers believe Pickens bought into Koito with an eye on a fast buck is that he has adamantly refused to reveal details of the deal he cut with Azabu Motor Corp. to purchase 32.4 million Koito shares.

“Pickens’ shrugging off of his ‘obligation’ to tell all--something he would be required to do in the U.S.--casts doubts over his claims to be a shareholders’ advocate, in the eyes of Koito management and many Japanese observers.

“Whether Japan will have to adjust to the world in the next century or vice versa, a drastic change in Koito’s business practices, much less those of the nation, now seem highly unlikely to be brought about by the self-appointed messenger from the Lone Star state.”

Editorial in the Asahi newspaper, July 1:

“With the current internationalization of the Japanese economy, we wonder how long the Japanese companies will be able to continue this kind of (exclusive) attitude in the future.

“Leaving aside the question of Mr. Pickens’ real intention for the moment, his argument seems to be rather reasonable. . . . It is inevitable that another Pickens will be coming to Japan to open up the closed Japanese investment market.”

Editorial in the Mainichi newspaper, July 1:

“The reason why the Japanese companies can make light of their shareholders may be the existence of stable shareholders. From the foreign investor’s point of view, these stable shareholders may be seen as an investment barrier. In this sense, Pickens’ argument that the Japanese stock investment structure or mechanism makes the acquisition of Japanese companies difficult can be considered correct.”

Article by Prof. Katsuro Kanzaki, a law professor at Kobe University, published in the Nihon Keizai Shimbun, June 30:

“I do not think that Mr. Pickens’ argument is totally right. However, Japan needs to achieve fairness in its investment market and be completely open to merger and acquisition activities in order to deal with the foreign investors’ criticism that Japan unfairly discriminates against foreigners.

Editorial in the Nihon Keizai Shimbun, July 1:

“Japanese managers may learn a good lesson from Pickens. Under the current trend of internationalization of Japanese business activities, a lot of friction with foreign countries will result unless Japan flexibly deals with the problems caused by the different perspective of the foreign investors, regardless of the number of shares held by foreigners.”