Japan Tobacco urged to sell drug unit by activist shareholder LIM

TOKYO (Reuters) -Japan Tobacco Inc, the cigarette conglomerate one-third owned by the government, is facing a shareholder motion to sell off its listed drug unit Torii

Pharmaceutical Co to boost shareholder value. Hong Kong-based activist fund LIM Advisors called on Japan Tobacco, in a letter reviewed by Reuters, to divest its 53% stake in

the drug maker, known mainly for its anti-allergy products, and launch 250 billion yen ($1.94 billion) share buybacks with the proceeds. The letter also said Japan Tobacco

doesn't have synergies with the drug unit or the expertise to manage its research and development and LIM plans to bring its proposal to the annual general meeting of shareholders

in March. Japan Tobacco acknowledged receiving the proposal but said it could not elaborate on the contents of the letter. "We are currently in the process of scrutinising

the content and legal matters," it told Reuters. LIM declined to comment. The proposal by LIM, which holds less than 1% of Japan Tobacco shares, comes as Japanese

regulators have frowned on so-called parent-child listings on the grounds that they can infringe on minority shareholder rights. LIM is also pushing for corporate charter

amendments to improve governance, including a prohibition of Japan Tobacco executives retiring to take jobs at Torii, a type of golden parachute arrangement known as

"amakudari."