Japan bank mishandles postal shareholder votes for 1,000 firms

[TOKYO] One of Japan's biggest providers of shareholder services failed to count some postal votes for about 1,000 companies ahead of annual general meetings, a person with direct knowledge of the matter said.

Sumitomo Mitsui Trust Bank's omission to tally all mailed-in ballots for firms including Toshiba didn't affect the results of shareholder resolutions at the gatherings, said the person, who wasn't authorised to discuss the matter publicly ahead of an official disclosure.

The case is the latest example of how Japan's continued reliance on analog processes and paperwork is hampering efficiency in the world's third-largest economy. New prime minister Yoshihide Suga has vowed to accelerate his predecessor's efforts to adopt digital technology.

Japan remains heavily reliant on mailed-in voting for shareholder meetings. Only 14 per cent of institutional investor votes were cast digitally in the nation in 2017, while more than 90 per cent were done that way in the US and UK, according to the Ministry of Economy, Trade and Industry.

Sumitomo Mitsui Trust will hold a news conference to explain its findings, the Nikkei newspaper reported earlier.

"We will make an announcement as soon as our investigation is completed," bank spokesperson Masaki Iwatsu said by phone.

The bank, a unit of Sumitomo Mitsui Trust Holdings, has been investigating the vote-handling process after a Toshiba shareholder said its ballot wasn't reflected in the tally even though it sent it three days before the deadline for the July 31 meeting.

Sumitomo Mitsui Trust said last week it received the vote before the deadline but it was nullified because it was post-dated by a day, in line with a long-standing arrangement with the postal service.

Japan Post expedites mail delivery during the shareholder meeting season so that the votes are handled on time, the bank said. Deliveries take place a day ahead of the usual time, but the mail is still recorded as arriving on the originally scheduled date.

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