According to AVI, the credibility of the company’s directors’ has been called into question “following its failure to hold former president Takakazu Uchiayma to account for decades of related-party transactions” and after the “debacle at Fujitec’s AGM where, despite shareholders not voting for his re-election, Takakazu Uchiayma was allowed to continue leading the company as chairman”.
In a statement released by AVI, they recalled how in the run up to the 2022 AGM Fujitec had failed to respond to “legitimate concerns raised by Oasis Management Company Ltd regarding related-party transactions has fallen short of basic standards of good corporate governance”.
Oasis Management had previously asked for an investigation into a recent event at the company regarding its independent board and called out Fujitec for its attempt.
In a statement, they said: “The aim of any fair, independent, and transparent investigation should be to determine whether any actions breached standards of good governance, and to identify measures to resolve and improve governance in light of any breaches — not just to provide ‘ease of mind’ and ‘rid the suspicions’ of shareholders.”
Oasis Management continued that, according to them, “Fujitec’s latest statement only underscores the pressing need for a governance overhaul at the Company” and called for shareholders to “VOTE AGAINST president Uchiyama to protect Fujitec from further abuses of power by the Uchiyama family”.
AVI has now joined this campaign, outlining in its own statement that this same investigation had not satisfied their concerns either.
They said that “despite the Board’s efforts to exonerate Mr Uchiyama of any wrongdoing, AVI remains entirely unconvinced that the numerous related-party transactions taken by Mr Uchiyama and his family do not pose a problem for Fujitec’s corporate governance.
“In recognition of Mr Uchiayma’s repeated involvement in related-party transactions and abuse of power, AVI voted against his reappointment at Fujitec’s 2022 AGM.”
The fiasco came when one hour before the AGM the motion to reappoint Uchiayma as president was withdrawn.
In the official notice concerning the change of representative director, Fujitec said Uchiyama was stepping down “due to the expiration of his term of office”.
However, AVI claims that this was “an effort to conceal a low approval rating for Mr Uchiyama’s reappointment”. Following the AGM and “despite lacking shareholder support, shortly after the AGM, Mr Uchiyama was reappointed as chairman”.
Joe Bauernfreund, CEO of AVI, said that Fujitec has “defied the voice of shareholders and circumnavigated the AGM voting process” by appointing Uchiayma as chairman.
“This flies in the face of the efforts by the TSE, the Government and regulators to enhance corporate governance.”
According to the CEO outside shareholders were privy to the information that this back and forth would take place and of the plan to “reappoint him as chairman should feel ashamed”.
Bauernfreund added said that “as outside representatives, they are there to safeguard the interests of shareholders. We question whether the actions of the outside directors have been taken in the best interests of shareholders and whether they have the credibility to continue in their current positions.”
These concerns followed a previously amicable four years relationship the company and AVI, with the latter supporting its abolishment of an anti-takeover measure, improved disclosure, enhanced shareholder returns, and efforts to standardise production.
But, this has evidently not been enough to override recent concerns, as Bauernfreund said: “As a long-standing shareholder, we have had many fruitful discussions with Fujitec representatives over the past years but we are alarmed by recent developments.
“Shareholders cannot stand by idly while they are being ignored. We are proactively evaluating our next steps.”
Fujitec has been contacted for comment.
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