CHICAGO--(BUSINESS WIRE)--RMB Capital (“RMB”), a Chicago-based investment advisory firm, is a long-term shareholder of Sanyo Shokai Ltd. (8011 JP, “Sanyo”) and owns more than 6% of the firm’s total outstanding shares. RMB is now demanding the resignation of the existing management team, as the firm believes they should take the responsibility of years of losses. RMB also proposed a slate for a new executive team that is highly qualified to turn around Sanyo’s operation.
RMB is making this demand based on the following rationale:
Internally promoted executives have proven to be unqualified for a turnaround mandate
RMB had previously supported the current executives, believing in their plan to reform Sanyo’s operation to turn around the business. RMB also supported them when opposing the dividend increase proposal raised by another shareholder in February 2019. However, the management team failed to meet shareholder expectations several times, despite having taken harsh actions such as laying off a quarter of the total employees. Sanyo is about to record four consecutive fiscal years of losses while the auditing firm expressed its doubt on Sanyo as a going-concern operation. As a result, Mr. Isao Iwata resigned as president in December 2019 while Sanyo’s stock price declined significantly, precipitating a decline in the firm’s corporate value.
Current executives must take responsibility for the company’s financial situation
RMB believes the management team is clearly responsible for the outcome, while they have been leaving stakeholders, including employees and shareholders, to deal with the repercussions. As such, RMB expects all the executives, including president Mr. Masayuki Nakayama, to take responsibility and resign at the annual shareholders meeting scheduled in May.
Hiring skilled outside executives will improve corporate governance—and long-term shareholder value
As a long term shareholder who has a strong commitment to Sanyo’s turnaround, RMB believes inviting talented executives from outside to form a whole new management team is essential for Sanyo’s success—especially as the COVID-19 pandemic is causing devastating disruption of the economy worldwide. RMB proposes the following candidates:
- Mr. Tetsuo Komori: He started his career as a consultant at McKinsey Japan, he has experience in managing businesses such as ASCII and Kracie (ex. Kanebo).
- Mr. Shinji Oe: He built his career at Mitsui’s textile division and turned around a Japan-based apparel company, Goldwin. He was invited as a vice president of Sanyo in March 2020.
- Independent directors, including Mr. Masakazu Hosomizu, a partner of RMB Capital.
RMB also suggests considering additional directors from inside and outside talent pools.
With this new management team in place, RMB expects the following actions and results:
- In the near term, execute drastic improvements in operation to stop the losses and make Sanyo profitable.
- In the mid to long term, build and execute a strong growth plan in Japan and overseas, potentially inviting strategic partners.
About RMB Capital
Headquartered in Chicago, RMB Capital is an independent investment advisory firm that serves high-net-worth individuals and families as well as institutional investors. Its businesses include wealth management, family office services, asset management, and retirement plan consulting. Its asset management business specializes in long-term, concentrated, active investing strategies with coverage that spans the market-cap spectrum and the globe. To learn more about RMB, visit https://rmbcapital.com.