[kenhwang]

Toyota owns a de facto controlling stake in Subaru (~20%).

Due to typical Japanese corporation by-laws, it only takes 33% share ownership for uncontested control of a corporation, and >50% of 33% means they'll never lose a vote for simple majority matters, which is basically everything except selling or dissolving the company.

The 20% threshold is for a guaranteed seat on the board, which lets them put issues up for a vote.

[omega3]

> Due to typical Japanese corporation by-laws, it only takes 33% share ownership for uncontested control of a corporation

It doesn’t make any sense.

[kenhwang]

Think of it like how Zuckerberg only owns 13% of Facebook but has >60% of the voting power.

Japanese law allows corporations to only require 1/3 of voting shares present for quorum, and then a majority of those present to pass resolutions. It also allows cross-shareholders (like Toyota) to have special privileges over regular class shareholders (typically right of first refusal over any resolution).

In practice, nothing much will pass without the largest shareholder's approval.

[axus]

How would they prevent two owners from owning 35% each? Could owner A vote something on Tuesday, and owner B vote something different on Wednesday?

[kenhwang]

In theory, yes, if those shareholders each keep not attending the meeting called by the other shareholder, they could both independently pass or undo each other's actions.

In practice in a hostile situation, they'll be courting the remaining shareholders to gain majority and won't miss those meetings, which tend to also have rules about how quickly or often they can be called.

It is also legal and typical for the bylaws to include poison pill provisions that would automatically protect the existing >33% shareholder, preventing a second >33% shareholder from existing (thus requiring multiple smaller existing shareholders to join forces to overthrow the largest shareholder).