Strategic Capital: To Resolve JSF’s ESG Issue Caused by the BOJ, MOF and the TSE, We Have Requested an Extraordinary General Meeting of Shareholders

JSF has been used as an amakudari destination by the BOJ (since 1950), the MOF (since 1960), and the TSE (since 1974) (Graphic: Business Wire)

TOKYO--()--Strategic Capital, Inc. (SC) is the manager of a fund that holds approximately 5.0% of Japan Securities Finance (JSF).

Since listing on the Tokyo Stocks Exchange (TSE), the Bank of Japan (BOJ), the Ministry of Finance (MOF) and the TSE have long been using JSF’s director and officer positions as an amakudari1 destination. Therefore, we have decided to convene an extraordinary general meeting of shareholders (EGM) because we believe the amakudari is damaging the shareholder value of JSF from the viewpoint of S (Society) and G (Governance) of ESG.

We hope that all of JSF’s shareholders will support our shareholder proposal from the perspective of S and G.

Please see our special website (here) for more details on the harm caused by amakudari, the breakdown of governance and the proposal.

SC’s proposal

  • Appoint three attorneys to conduct an investigation into the background of the amakudari by the BOJ, MOF and TSE into JSF
  • The investigation to focus on how the current President and Sr. Managing Executive Officer (BOJ alumni), current Vice President (MOF alumni) and current outside director (TSE alumni) were appointed

Issues with amakudari
S: A violation of social justice

  • It is a subversion of the regulations on amakudari, which are aimed at preventing collusion between public and private sectors
  • BOJ and MOF officials see their remuneration increase by more than triple as a result

G: Hindering the promotion of outstanding human resources

  • Suspect that senior management appointments are being made solely based on work history, irrespective of individual qualifications
  • The Nominating Committee is tacitly approving the amakudari, and governance by the outside directors and Nominating Committee has ceased to function.
  • The current president, who is a BOJ amakudari, does not even understand the meaning of ROE

The amakudari facts
amakudari by BOJ directors

  • Since becoming listed in 1950, all 10 presidents of JSF, including the current president, Shigeki Kushida, were former executive directors (ED) of the BOJ

amakudari by BOJ director-generals

  • Since 1980, all seven BOJ director-generals (and lacking ED experience) were appointed as managing executives within one month of joining JSF

amakudari from the MOF

  • Since 1960, all 10 employees from the MOF were appointed to managing executive or higher positions within one month of joining JSF

amakudari from the TSE

  • Since 1974, there has been 7 amakudari from the TSE and since 1994, they have been appointed as “outside” directors of JSF

A message to investors in Symphony Financial Partners’ funds
Symphony Financial Partners (SFP) through its funds is the largest shareholder in JSF with approximately 21.9%.

Voted against the proposal to disclose the President’s remuneration

At the last AGM, SC submitted a formal shareholder proposal to “disclose the individual remuneration of the President”, pointing out that all JSF presidents were from the BOJ. ISS recommended supporting the proposal. SFP, however, opposed the proposal.

Should amakudari be supported?

It is clear JSF is an amakudari destination for an organization that plays a central role in the Japanese economy. It is not easy to get a return on one’s investment nor do we think it is the intention of investors to tolerate amakudari which is against social justice.

To the investors

It is essential for JSF to put an end to the harmful practice of amakudari and to increase shareholder value through appropriate personnel and good management. We would like you the investors to encourage SFP to exercise its voting rights in an appropriate manner.

This press release is an abbreviated reference translation of the original announcement in Japanese. In the event of any differences between the original Japanese version and the English translation, the original Japanese version shall prevail.

1 amakudari – (literally "descent from heaven") is a metaphor for the institutionalized practice where Japanese senior bureaucrats retired to high-profile positions in the private and public sectors.


For press inquiries, please contact
Strategic Capital, Inc.
Contact: Investment Department
TEL: +81-3-6433-5277

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For press inquiries, please contact
Strategic Capital, Inc.
Contact: Investment Department
TEL: +81-3-6433-5277