HONG KONG & TOKYO--(BUSINESS WIRE)--Oasis Management Company Ltd. (“Oasis”) is the manager to funds that beneficially own over 16.5% of elevator manufacturer and servicing company Fujitec Co., Ltd. (6406 JT) (“Fujitec” or the “Company”). In December 2022, Oasis requisitioned the Fujitec Board of Directors (“Board”) to call an extraordinary general meeting (“EGM”) to allow shareholders to vote on proposals to remove six incumbent Outside Directors, and to appoint six new independent and experienced Outside Directors. The EGM will take place on February 24, 2023.
Oasis welcomed the recently published research report from the leading independent proxy advisory firm, Institutional Shareholder Services Inc. ("ISS"), which recommends that Fujitec shareholders vote FOR all of the Oasis proposals including the REMOVAL of the six incumbent Outside Directors, and AGAINST the appointment of two Fujitec-sponsored Outside Director nominees.
Unfortunately, on February 10, 2023, following the publication of ISS’s recommendations, Fujitec released further information that aims to misinform shareholders and intimidate ISS’s research team by publicly attacking them and questioning their integrity with statements such as, “ISS did not conduct its own analysis”. Although Oasis is not surprised by such attacks and tactics, this is exactly the behavior for which shareholders need to hold the incumbent Outside Directors accountable and no longer tolerate.
Today, Oasis releases its full response to Fujitec’s latest attack at www.protectfujitec.com, in which we address:
- Fujitec’s claim that Oasis’s aim is to acquire “management control” is a completely false allegation. Oasis’s proposals aim to strengthen the oversight mechanism at Fujitec by appointing Outside Directors – who even Fujitec cannot deny the independence of from Oasis - and removing incumbent Outside Directors. Oasis’s proposals do not target any of the executives on Fujitec’s Board and instead aims to protect stakeholders from the “Uchiyama Family Control” that has abused its position of power at the expense of stakeholder interests.
- Fujitec claims that the Board was “baffled” by the timing of Oasis’s proposals, aiming to suggest to shareholders that they have been responsive and aiming to engage constructively. In reality, Fujitec has refused to engage constructively with Oasis, its largest shareholder, and many other shareholders since the 2022 AGM. Only five months after the 2022 AGM, Fujitec finally agreed to meet with Oasis, but barred it from asking about Fujitec’s governance. Fujitec’s Board is not in a position to be "baffled" in light of its aggression to its shareholders and lack of honest engagement, let alone its objectively egregious behavior at the 2022 AGM. We ask Fujitec’s Outside Directors to read our public statement after the 2022 AGM, as our position was quite clear.
- Fujitec is critical of ISS’s recommendations and believes it is “inconsistent” due to the fact that ISS had recommended in favor of the Outside Directors at the 2022 AGM. It is worrying to see that the incumbent Outside Directors are still blind to shareholders’ concerns and fail to acknowledge how unprecedented their decision was to violate shareholders’ most basic right to hold directors accountable by exercising their rights through their votes.
- Fujitec rejects Oasis’s calculation that approximately 65% of the votes were cast AGAINST Takakazu Uchiyama at the 2022 AGM. However, Oasis has disclosed which investors supported and rejected Takakazu’s appointment at the 2022 AGM based on publicly available information. Regardless of the exact result, which Fujitec could easily disclose but refuses to do so, what is problematic, and what the Outside Directors should be held accountable for, is the decision to rob shareholders of their most basic right and the appointment of Mr. Uchiyama to an unaccountable (but paid) position.
- Fujitec continues to mislead investors that the decision to withdraw Takakazu Uchiyama’s appointment was “following the decision to establish a Third-Party Committee”. This is factually incorrect. Fujitec announced its decision to establish a Third-Party Committee a week before the 2022 AGM, which at that time was still calling for shareholders to support Takakazu Uchiyama’s appointment to the Board.
- Fujitec’s defense of promoting Takakazu Uchiyama to the unelected “Chairman of the Company” position does not match with the reality of the elevator industry and wholly ignores the concerns shareholders have on the level of influence he can exert over Fujitec. Takakazu Uchiyama's role at Fujitec was an inherited position and not based on merit. Under his tenure, Fujitec has fallen further behind its competitors, and stakeholders are at risk of further nepotism given the lack of clarity provided by Fujitec on the role of his son, Yusuke Uchiyama. It is worth reminding that Yusuke Uchiyama was the beneficiary of the luxury apartment that Fujitec sold at below market value.
- Fujitec’s decision to appoint two new Outside Directors at the upcoming EGM, while attacking the credentials of Oasis’s independent nominees, only serves as a distraction from discussing the real governance failures at Fujitec. The two proposed Fujitec candidates are linked to Fujitec’s legal advisors – Kitahama Partners and Miura & Partners – and therefore their true independence is in doubt, and their skills and experience have been exaggerated at the expense of retaining any form of credibility. Meanwhile, Oasis’s Outside Director nominees are fully independent and bring truly necessary experience and skills, and all shareholders were able to meet them and ask them questions. On the contrary, Fujitec’s Outside Directors have yet to make themselves available to respond to our shareholder questions.
In this age of increased transparency and accountability, institutional investors need to protect the assets for which they are stewards on behalf of their underlying clients and ensure that portfolio companies are governed in a manner that remains accountable and does not misappropriate corporate assets. Fujitec casts a very unfortunate shadow over the genuine governance improvements corporate Japan has made over the recent years, and responsible stewards have an opportunity to send a clear signal to company boards that they will hold them accountable for poor governance.
Oasis continues to campaign for the benefit of all stakeholders, and reaffirms its recommendation to shareholders, which has now been unanimously supported by leading independent proxy advisor, ISS, to:
Vote AGAINST Agenda 1 (Fujitec’s Proposal)
Vote FOR Agenda 2-7 (Oasis’s Proposals)
Now is the time to change Fujitec.
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 private funds that are shareholders of Fujitec (the "Oasis Funds").
This material is not intended to solicit voting in favor of Oasis’ proposals, to which rules concerning solicitation of proxies applies.
Oasis is not in any way soliciting or requesting shareholders to jointly exercise their voting rights together 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.
Oasis disclaims its intention to be treated as a Joint Holder with other shareholders under the Japanese Financial Instruments and Exchange Act (“FIEA) by virtue of its act to express its view or opinion or other activities to engage in dialogue with other shareholders in or through this Document or any website.
This statement and related materials exclusively represents the opinions, interpretations, and estimates of Oasis in relation to the upcoming EGM. Oasis is expressing those opinions solely in its capacity as an investment advisor to the Oasis Funds.