Toyota Motors announced the initiation of a stock buyback plan worth approximately $5.16 billion.

Toyota Motor Corporation announced on Foreign exchange tradersTuesday that it will initiate a share buyback plan worth 807 billion yen (approximately 51.6 billion dollars).

This buyback is being carried out against the backdrop of governance reforms driven by the Tokyo Stock Exchange, which have prompted large companies to unwind cross-shareholding relationships.

In Japan, holding shares in each other’s companies has long been seen as a way to strengthen business ties. However, governance experts and foreign investors argue that this practice can lead to lax governance, shielding management from shareholder scrutiny.

Last month, Bloomberg News reported that major banks Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group plan to sell Toyota shares valued at a combined 8.5 billion dollars.

In a statement, Toyota said it would conduct a tender offer at a price of 2,781 yen per share from July 24 to August 26.

Additionally, SMFG, Tokio Marine Holdings, and MS&AD Insurance Group also announced they would sell back Toyota shares to the automaker.

A document earlier this month revealed that Japanese financial groups, including Tokio Marine, Sompo, and two MS&AD subsidiaries, plan to sell Honda shares valued at 535 billion yen.

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