Oasis Response to Fujitec’s Superficial Measures for Strengthening of the Company’s Corporate Governance System
HONG KONG & TOKYO–(BUSINESS WIRE)–Oasis Management Company Ltd. (“Oasis”) is the manager to funds that own over 9.7% of Fujitec Co. Ltd. (“Fujitec” or the “Company).
After independent proxy advisory firms ISS and Glass Lewis both published opinions recommending that shareholders of Fujitec vote against President Uchiyama’s reelection at the upcoming AGM, Fujitec announced superficial measures it says will strengthen Fujitec’s corporate governance (the “June 8 release”).
Oasis is once again shocked by President Uchiyama’s attempt to issue a hasty press release and declare that Fujitec has no governance failings, despite the overwhelming evidence to the contrary, and on top of the many questions that the Company still refuses to answer. The Company’s willingness to maintain President Uchiyama’s narrative without conducting a truly independent investigation demonstrates the scope of his power over Fujitec. Shareholders must end his absolute control by voting against President Uchiyama at the upcoming AGM on June 23.
We believe the superficial measures noted in the latest Fujitec release are either misleading, ineffectual, or simply untrue, as follows:
Fujitec’s June 8 release states that in light of Oasis’s findings, the Board of Directors have “reconfirmed the basic policy that “the Company will not conduct related party transactions in principle.” (emphasis added)
This does not appear to be true. First, Fujitec has never before mentioned a basic policy against conducting any related party transactions. Second, if there were such a basic policy, then President Uchiyama has clearly breached it numerous times without consequence.
Fujitec claims that the appointment of an independent director as chairman will also improve governance.
The Company, however, has nominated Shigeru Yamazoe, who is one of the two directors that led the superficial, non-independent and ineffectual “investigation” into President Uchiyama. Mr. Yamazoe’s whitewashing of President Uchiyama’s corporate governance abuses demonstrates that he will remain under President Uchiyama’s control and will not act independently in the best interests of all of Fujitec’s stakeholders.
Fujitec also claims that governance will be strengthened under the leadership of the Nomination and Compensation Committee.
However, this Committee consists of the same two directors — Shigeru Yamazoe and Nobuki Sugita — and another internal director who led the flawed so-called “investigation” into President Uchiyama. We believe that these directors are under the heavy influence of President Uchiyama and shareholders cannot rely on them to strengthen governance.
The Company also claims that expanding the ratio of independent directors from 56% to 60% will strengthen governance.
This could be true, if a truly independent director were to be appointed. However, Fujitec has nominated Kaori Oishi, a partner of Kitahama Law Firm, as the new outside director. Fujitec has had a long-term relationship with Kitahama Law Firm. Terumichi Saeki, a partner at Kitahama Law Firm, has served on Fujitec’s audit and supervisory committee from 2009 to 2014, and as a director of Fujitec from 2014 until 2021. Fujitec has been an important client for Kitahama Law Firm for a long time, according to Fujitec disclosure materials. Nominating a director with a long-standing relationship with Fujitec who will not be truly independent will not
Fujitec’s latest claims that these superficial measures will improve its governance demonstrates that the Company is not taking corporate governance seriously and continues to elevate President Uchiyama’s interests over those of all other stakeholders. Fujitec has failed to take any responsibility or carry out a genuine investigation into the related-party transactions. Instead, the Company has published questionable and misleading statements about rapidly implemented “measures” and “investigations” which, in Oasis’s view, are attempts to mislead shareholders. Instead of addressing previous corporate governance abuses, the Company has added many more.
We believe that the only way to improve corporate governance at Fujitec is to vote AGAINST President Uchiyama at the AGM on June 23.
All investors are encouraged to review our detailed materials available at www.protectfujitec.com, which include questions for shareholders to ask the Company.
Oasis Management Company Ltd. manages private investment funds focused on opportunities in a wide array of asset classes across countries and sectors. Oasis was founded in 2002 by Seth H. Fischer, who leads the firm as its Chief Investment Officer. More information about Oasis is available at https://oasiscm.com. Oasis has adopted the Japan FSA’s “Principles for Responsible Institutional Investors” (a/k/a Japan Stewardship Code) and in line with those principles, Oasis monitors and engages with our investee companies.
The information contained in this press release (referred to as the “Document”) is an information resource for shareholders in Fujitec offered by Oasis, the investment manager to funds that are shareholders of Fujitec (the “Oasis Funds”).
The Document is not intended to solicit or seek shareholders’ agreements to jointly exercise voting rights with Oasis. Shareholders that have an agreement to jointly exercise their voting rights are regarded as Joint Holders under the Japanese large shareholding disclosure rules and they must file notification of their aggregate share ownership with the relevant Japanese authority for public disclosure under the Financial Instruments and Exchange Act. Oasis does not intend to be subjected to such notification requirement. The Document exclusively represents the opinions, interpretations, and estimates of Oasis.
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