March 31, 2015 2:30 pm
Japan to tighten scrutiny of IPOs
Kana Inagaki in Tokyo
Japan’s main exchange operator is taking steps to restore confidence in the stock market after an investor outcry over a recent string of questionable initial public offerings. Atsushi Saito, chief executive of Japan Exchange Group, said on Tuesday that JPX will toughen the screening process for companies seeking listings by requiring them to disclose more detailed information on their earnings outlook. It will also tighten checks on accounting practices. The move came after several Japanese companies over the past year disclosed accounting irregularities or revised their guidance shortly after their shares floated on the Tokyo Stock Exchange.A number of initial public offerings have raised questions about how adequately companies are screened amid surging demand for start-ups looking to raise money in a market fuelled by monetary and fiscal stimulus.
“This is embarrassing and we feel sorry that investors are feeling deeply disappointed,” Mr Saito said at a news conference.
JPX is also calling on brokerages and auditing firms to co-operate in tightening screening of new listings. “I want the brokerage and auditing firms to firmly do their research. It shouldn’t be done for profit. And it can’t be a matter of not knowing,” Mr Saito added.