Parent-Subsidiary Listings under Closer Investor Scrutiny
Tokyo, Sept. 29 (Jiji Press)--Companies listed on stock exchanges along with their subsidiaries have come under closer scrutiny by investors due to continuing concerns over corporate governance.
Such listings serve a dual purpose for parent companies, as they can maintain their influence over subsidiaries and at the same time generate profits from the sale of some of their shareholdings in the units. But investors have questioned the independence of such listed subsidiaries.
For listed subsidiaries, remaining under the auspices of their parent companies contributes to management stability, which in turn can help sustain worker morale and boost the hiring of capable workers.
As listed companies, both a parent and a subsidiary have multiple ways of raising funds and can pursue faster growth as a corporate group.
In July, Softbank Group Corp. <9984> filed a preliminary application to the Tokyo Stock Exchange for approval of the listing of mobile phone subsidiary Softbank Corp.
[Copyright The Jiji Press, Ltd.]