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BOOK SERIES | Minority Shareholders, Chapter 4: Making Ripples for Auntie Sumida

Minority Shareholders, Chapter 4 of Shin Ushijima's novel introduces the next key character in a modern-day drama from the world of family-owned companies.



Minority Shareholders

In this chapter of Minority Shareholders, I continue the story of Norio Takano. He is not a specific person; he is a character created for my book out of some high rollers who had existed during the bubble period.

As a young lawyer, I witnessed the generation of enormous wealth from scratch. A minority shareholder of a family company brought an action to the court and succeeded in taking hundreds and thousands of yen. I saw it firsthand. Ten years after the bubble popped, I started work related to corporate governance. In this book my fictional characters tell the story of problems that persist in joint-stock corporations. What is an organization called a company? What if Norio Takano were reborn in this era?

This story is a work of fiction. Any resemblance to actual characters or organizations is entirely coincidental and unintentional. ー Shin Ushijima

Read earlier chapters of the series.

Minority Shareholders
Book cover, "Minority Shareholders" by Shin Ushijima.

Chapter 4: Making Ripples for Auntie Sumida

Continuing from Chapter 3: Lawyer Ooki has just finished explaining the perils of inheriting a small number of shares in a private company and the tax consequences of family-owned companies owning the family home and other assets. Norio Takano has been listening with a quiet sense of alarm as the potential pitfalls are explained by his lawyer and old friend. His own family business could be a "honeypot" for the tax office, he learns. "It's just like we're living on ground with landmines", he offers.  

Having finished his talk, Ooki pushed the button under the seat to recline it. 

"By the way, Takano, what did you want to speak with me about? Did you say someone asked you to buy unlisted shares?"

"Oh, right, thanks for reminding me." Takano suddenly remembered why he had urgently come to see Ooki. 


"It's about my mother's friend. They are the same age. You know, elderly people nowadays, especially women, are surprisingly hale and hearty." 

Ooki nodded in agreement. "Yes. It's not uncommon to see people aged one hundred years and up out there. They say there are just under 70,000 such people nationwide. Though they have reached old age, they can live happily, thanks to civilization. Civilization is when virtuousness extends to all parts of society. Good times, right? It's not palatial mansions, extravagant attire or flamboyant and showy visual aspects of life that make people happy in the end."

Takano smiled wryly.  

"Oh, that's the philosophy of Takamori Saigo (a samurai in the Edo era, 1603-1867), isn't it? On top of things as always! Anyway, be that as it may, not all of them live happily and peacefully."

Auntie Sumida's Tears

Takano knitted his brow, which was a habit of his when he was serious. There was a deep wrinkle clearly shown between the eyebrows of the sixty-eight-year-old man's face.

"I have known her well since long ago. I call her Auntie Sumida. Her husband ran an iron factory in Sumida-ward and was in the money. That was more than 60 years ago, in the 30s of the Showa era (1955-1965), a period of so-called rapid economic growth. We remember that era, right? Auntie Sumida came to my mother and beseeched her to find someone to buy the shares she owns. My mother has her money stashed away and she doesn't mind spending it on shares. Out of curiosity, she listened to her in detail."


Ooki was wondering what urgent business would bring Takano to his office during work hours. He had said it was quite pressing, so Ooki had canceled his lunch appointment. Instead he got his secretary to arrange sandwiches from '赤トンボ' (Akatombo) for the two of them. He was eager to hear what Takano had come to say.


"My mother said that Auntie Sumida had pleaded for her help with tears welling up in her eyes."

"Oh, sounds like quite the drama."

"Come on, don't be facetious. At first I didn't take it seriously…sounded exaggerated. As you know, my mother lays it on thick about anything. You know her, right? But she gave me a detailed account and I found that she hadn't overstated the matter."

Takano's Mother

Ooki knew Takano's mother well. When both of them were in senior high school, a long, long time ago, she used to serve him supper at Takano's house in Himonya. She liked entertaining guests with what she made, and Ooki had thought she was a very good cook. Her dishes were delicious. She did not use haute ingredients, but making mediocre-quality fish or meat into delicious food was second nature to her.

She had said, "It's the broth that makes all the difference. I use kelp and dried bonito flakes to make broth. Among others, kelp sourced from Rausu in Hokkaido and bonito from Makurazaki in Kagoshima. There is a saying, 'The way to a man's heart is through his stomach.' You can't understand that yet, though."

It had puzzled Ooki. Though he was sixty-eight years old at the moment, he clearly remembered she had always worn a proud look on her face. She had been a well-endowed, mature and seductive woman. Her skin had been smooth and white and she looked beautiful for a middle-aged woman. She was thirty-eight years old at that time.

She had said that she had been a weakling when she was young.

"I suffered from serious anemia though I was chubby. Sometimes I couldn't get myself out of bed." She had also said that that was why she had been particular about the ingredients she used in her cooking and what she ate.


More than 50 years had passed since then, and Takano and Ooki had reached their twilight years. That would make Takano's mother eighty-eight years old. Ooki had not seen her for years, but he could imagine how she had changed. He thought that, as old as she was, she must still be as beautiful as ever. 

A Sudden Warning 

Ooki recalled Takano's mother, and feelings of affection rose within him. His heart twinged a bit. He still cherished the same emotions as he did as a senior high school student. Ooki, age sixty-eight, was no different from what he was in senior high school. Such feelings were usually hidden at the bottom of his heart, but tended to spring up on occasions like this. 

Ooki relooked Takano in the face. He spoke to Takano, who looked his age of sixty-eight.

"You must not buy her shares. Not a chance!"

Ooki, carrying a faint smile, spoke to Takano as if to persuade him to pass it up.

"Look, Takano, in Japan you cannot buy shares of an unlisted company."

"Huh? What do you mean?"

"Well, to be more exact, you cannot buy shares of an unlisted company unless you obtain approval from the company."


"Which means that you cannot sell the shares you own, either, right? Oh, no!"

"No, I didn't say that. You can sell the shares, but you cannot sell them to just any person you want to. You know, the company is designed to prevent just anybody from being a shareholder of the company. 

"Actually, it's often the case that you can only sell your shares to a person unilaterally designated by the company. Of course, there may be an owner president who runs his business pretty fairly that is generous enough to approve of just anybody as a shareholder. But very few companies are like that."

Ooki seemed accustomed to repeating the same explanation over and over. He tried rephrasing it. "When you want to sell or buy shares, you have to ask the company to approve it. In advance!

Permission of the President

"And the company answers, 'OK, I understand you want to sell your shares. If so, sell your shares to either the company or a person the company has chosen.' The company, if it doesn't want to purchase the shares on its own, is at liberty to designate someone as a purchaser to act in favor of the company. The same is true for the other way. If you ask for consent from the company to purchase its shares, you are likely to receive the same reply."

"I see. I thought I could sell my shares to anybody without a hitch."

"Yeah, many people think as you do."

Ooki slid closer to a Wedgwood saucer with a tea cup on it. The cup was half-empty. It was Earl Grey, Ooki's favorite. 


Ooki likes to drink coffee in the morning and tea in the afternoon. He drinks in the order of Earl Grey, second flush Darjeeling and then first flush Darjeeling. He finds something lacking in the light-colored first flush of Darjeeling tea, but that "something lacking" satisfies his spirits sometime in the afternoon. The tea leaves are procured from 'Leaful Darjeeling House' in Ginza. When given tea as a gift, he tries it. If he likes it, he keeps drinking it for a while. He only uses tea bags when making himself a cup of tea in the dead of night.

Staring at Takano, he took the cup in his right hand and moved it to his mouth. He sipped the tea and returned the cup to the saucer. In his opinion, a tea's genuine quality could only be revealed when lukewarm. 

Not So Easy Being a Friend

"Nobody wants just anybody in the company, right? There is no company that has nothing to hide. 

"I'm not saying they are doing improper business. They usually have a lot of things to keep confidential including the development of new products, relationships with their clients and customers, production or wholesale costs, etc. That's why they restrict cumulative voting because they don't want any renegade members on the board of directors or any dissenting shareholders in the company."

"What is cumulative voting?"

"Oh, sorry. That's something I shouldn't have mentioned. It's a system of no practical use. What I want to say is, if just anybody becomes a shareholder, it can cause a big fuss. If someone has acquired even one share of the company, they have a say at the general shareholders' meeting. If they have a 3% stake, they have the right to access the accounting records. It's written in the law. The law changed in 1966, which has made things more onerous as I've just explained." 

Ooki's quiet voice drifted through the air. 

"Anyway, what on earth has driven you to buy such shares?"


"As I said, my mother was begged by her friend to find someone to buy them."

The Role of Ripples

"Oh, that's right, you said so, sorry! OK then, buy them. You'll have to go through a lot of procedures, possibly all to no avail. Brace yourself for it. As I just explained, the company won't approve it. So it would be better for you to appear as a sort of 'stalking horse.'"

"Sorry, I cannot make heads or tails out of that."

"Oh, really? It's common sense in our world."

"In the world of lawyers, huh?"

"Yeah, outrageously bothersome procedures are stated in the law. If you act as a stalking horse to cause some ripples through the company, circumstances may conspire to enable Auntie Sumida to sell her shares to somebody related to the company. So if you play the role of a stalking horse, you can mask your true plans and help her out in the end."

"What? I don't get it."

Continues in: Minority Shareholders, Chapter 5: A Stalking Horse



Minority Shareholders is a work of fiction and any similarity to real characters, companies and cases is purely coincidental and unintentional. Sign up to join our mailing list and look for the next chapter every Saturday on JAPAN Forward.

Author: Shin Ushijima

The founding partner of Ushijima & Partners, lawyer Shin Ushijima has an enormous wealth of experience in international transactions, merger and acquisition, dispute resolution, system development, anti-monopoly law, labor, and tax law. Concurrently, he heads an NPO called the "Japan Corporate Governance Network." And in his leisure moments, he writes fiction. Additional details on Shin Ushijima's career, awards, publications and more are available at his website: Ushijima & Partners, Attorneys-at-Law.

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