And the keiretsu system of cross-shareholdings among "families" of firms with common interests made it hard for outside shareholders to apply pressure on banks to lend more profitably.This system worked reasonably well while the economy was immature and money was scarce; but now that the economy has grown older and money more plentiful, the system has become counterproductive.
"It's very bad ownership practice, this cross-shareholding among chaebol," he said.
Mr. Murakami's bid for Shoei exposed the impediments that Japan's system of cross-shareholding among banks and corporations pose for investors.
Meanwhile, their share prices have suffered as the unwinding of cross-shareholdings among keiretsu companies has gathered pace.
The second has been large cross-shareholdings among friendly companies, which make hostile takeovers all but impossible.
The group's structure was a labyrinth of cross-shareholdings among operating companies and tiny stakes held by the private holding company, Tata Sons Limited (TSL).
Meanwhile "Deutschland AG", the clannish system of cross-shareholdings among banks and enterprises, was killed off by Anglo-Saxon notions, and no one wants it back.
The move is part of an alliance, which includes cross-shareholdings, among Santander, Royal Bank and three other European banks, Societe Generale of France, Commerzbank of Germany and San Paolo-IMI of Italy.
With the infamous cross shareholdings among Japanese firms unravelling and return-seeking investors gaining influence, there has long been talk that a similar, if smaller, takeover trend may start in Japan.
Individual investors in Japan still hold little power compared with the institutional shareholders that make up much of the investor base, often as part of a web of cross-shareholdings among creditor banks, suppliers, customers and other interrelated companies that invest in one another to insulate themselves from the market.
