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.
Oasis now also welcomes the strong endorsement from another independent proxy advisory firm, Glass Lewis, which recommends that Fujitec shareholders vote FOR the majority of Oasis’s Outside Director nominees due to “widespread, pervasive governance issues, which we don't expect are likely to be remediated by adhering to a checklist approach to governance or simply stripping Mr. Uchiyama of his official titles. The seemingly conflicted directors who remain on the board allowed Mr. Uchiyama to maintain his proximity to Fujitec's board and management, where he may continue to exert his influence on the Company's direction and the outcome of the ongoing investigation into related party transactions.”
Key statements by Glass Lewis in its voting recommendation include:
- “[R]ather than let the voices of Fujitec's shareholders be heard at the 2022 AGM, the board withdrew the proposal to re-elect Mr. Uchiyama at the last minute, thus shielding him from accountability and depriving shareholders of their fundamental right to elect their representatives on the board. More concerning, immediately following the 2022 AGM, the board went a step further, explicitly ignoring the will of shareholders, by appointing Mr. Uchiyama to an un-elected and, thus, unaccountable honorary chairman emeritus position on the Fujitec board, preserving a role for him going forward.”
- “Although the board claims Mr. Uchiyama's current position does not officially confer him any power to vote in the boardroom or manage Fujitec's business, we believe his continued proximity to the highest levels of the Company's management and governance system is problematic, particularly given the ongoing third-party committee investigation into various related-party transactions and the alleged misuse of corporate assets by the Uchiyama family.”
- “In either case, the retention of Mr. Uchiyama in any capacity is in direct conflict with the desire of shareholders, which was clearly expressed via their voting instructions prior to the 2022 AGM, as well as in statements issued in the aftermath of the board's actions and during the leadup to this EGM.”
- “In our view, the course of events preceding and following the Company's 2022 AGM provide a strong indication that certain core tenets of corporate governance are not functioning properly at Fujitec.”
- “Further, it seems clearer now than it did a year ago that these issues stem not only from the concentration of Mr. Uchiyama's power in his previous dual roles as director/chairman and president/CEO, but also from the outside directors' apparent allegiance to Mr. Uchiyama over the rights, interests and will of public shareholders, which raises serious concerns regarding the independence of the outside directors, in our view.”
- “Thus, we believe the board's actions are indicative of widespread, pervasive governance issues, which we don't expect are likely to be remediated by adhering to a checklist approach to governance or simply stripping Mr. Uchiyama of his official titles. The seemingly conflicted directors who remain on the board allowed Mr. Uchiyama to maintain his proximity to Fujitec's board and management, where he may continue to exert his influence on the Company's direction and the outcome of the ongoing investigation into related party transactions.”
- “On the whole, we believe serious governance concerns, along with the Dissident's critiques on business strategy, operational performance and shareholder returns, establish a sufficient basis for supporting substantial change to the composition of Fujitec's outside directors.”
- “Meanwhile, on the Dissident slate, we generally find the Oasis nominees have a complementary and diverse mix of skills, perspectives and experience, including those who may appear somewhat overlapping in terms of offering elevator industry experience or a governance focus.”
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.