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Tycoon Itoyama Sells Half His Stake In Japan Airlines

This article is more than 10 years old.

Eitaro Itoyama, Japan's fifth richest resident, a former lawmaker and Japan Airlines' largest individual shareholder, has lost patience with the carrier. The tycoon--worth $4.2 billion by our most recent estimation--said Wednesday he had sold half of his stake in Japan's flagship carrier on the stock market.



Itoyama, also the largest stakeholder at Mitsubishi Heavy Industries , Japan's biggest aerospace company and defense contractor, disclosed the sale on his Web site, saying he cannot secure a return on his 50 billion yen ($424 million) investment in JAL because it has not paid dividends for the second consecutive year.



Even though corporate confrontations are still fairly unusual in Japan, Itoyama has been fiercely critical of JAL's business practices and in February called for the resignation of then President Toshiyuki Shinmachi, who duly agreed earlier this month to leave the company amid a management revolt. About a dozen other top brass also stepped down from JAL and its two major subsidiaries as part of the shake-up, which was approved at an extraordinary board meeting on March 1.



A day later, JAL unveiled a five-year management plan to win back passengers who are choosing to fly with rival airlines amid concerns about JAL's safety and financial problems. In the plan JAL announced it would pay no dividend for fiscal 2005, which ends this Friday, and also called for dividends to be withheld in fiscal 2006.



Itoyama, who also runs nine golf courses, expressed his dissatisfaction with the plan shortly after it was made public, and threatened to sell up if JAL failed to meet its earnings target. According to a media report, Itoyama's message posted on his Web site Wednesday said that he would repurchase JAL shares "if the management strives to increase shareholder value," but added that if the share price drops further, "I will consider selling more shares." He still owns 40 million shares and remains the top individual investor. More...

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