Toyota wins investor vote on new shares

Toyota won approval yesterday for a controversial new stock sale that it defended as a way to lure stable, long-term investors, overcoming stiff opposition from some institutional shareholders overseas. The world's biggest automaker said 75 percent of shareholders voted in favor of the plan that would see it sell up to 50 million of the new shares, which must be held for five years and would not be publicly traded. Largely restricted to Japanese investors, the new "Model AA" shares carry voting rights and are to be priced at a 20 percent premium on Toyota's common shares, which closed at 8,395 yen ($68) in Tokyo. Dividends paid on the new shares would rise from 0.5 percent to 2.5 percent by the end of the five-year holding period when investors could convert them to common shares or Toyota would repurchase them, it said. Toyota said the share structure would lure longer-term investors and help it fund expensive research work, particularly on next-generation technology such as fuel cell cars. The vote comes weeks after Japan formally adopted a corporate governance code that was hailed as ushering in a new era of transparency for investors. U.S.-based advisory Institutional Shareholder Services (ISS) warned that the new shares would reduce investor influence over management decisions.