The Livedoor Bid and Hostile Takeovers in Japan: Postwar Law and Capitalism at the Crossroads

in Law and Capitalism

Published by University of Chicago Press

Published in print June 2008 | ISBN: 9780226525273
Published online March 2013 | e-ISBN: 9780226525297 | DOI:
The Livedoor Bid and Hostile Takeovers in Japan: Postwar Law and Capitalism at the Crossroads

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This chapter focuses on a corporate scandal in Japan: the hostile takeover bid by Livedoor, a brash Internet company, for Nippon Broadcasting System Inc., a radio broadcaster affiliated with a major Japanese media conglomerate. It shows that the bid—in a country where hostile takeovers have been rare and tainted with social stigma—caused enormous controversy and exposed major fissures in Japanese capitalism. It also added momentum to a series of important changes in governance structures in Japan, including the use of formal law (in the form of judge-made rules) in the transfer of corporate assets. It is striking that the dénouement of the episode includes a major transplantation of United States (specifically Delaware) corporate law into a set of nonbinding guidelines to help govern corporate responses to hostile takeovers in Japan and the subsequent arrest of Livedoor's president on charges of securities and accounting fraud. This rapid pace of the appearence of this series of events reflects important shifts in expectations about the role of law in the Japanese economy.

Keywords: hostile takeovers; Livedoor; Nippon Broadcasting System Inc; capitalism; Japan; law; United States; Delaware; corporate law; accounting fraud

Chapter.  8768 words. 

Subjects: Company and Commercial Law

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