Statement by Oasis on the “Opinion on Hokuetsu’s Corporate Governance” by Daio Kaiun (Securities Code: 3865 JT)

* Oasis issues statement on Daio Kaiun Opinion

* Daio Kaiun Opinion notes Hokuetsu's corporate governance issues

* Oasis calls on shareholders to Vote Against the reappointment of Mr. Kishimoto as President and Representative Director at Hokuetsu’s AGM

HONG KONG--()--Oasis Management Company Ltd. (“Oasis”) is the manager to funds that beneficially own over 18% of Japanese paper manufacturer Hokuetsu Corporation (3865 JT) (“Hokuetsu” or the “Company”). Oasis has adopted the Japan FSA’s “Principles of Responsible Ownership” (a/k/a the Japan Stewardship Code) and in line with those principles, Oasis monitors and engages with its investee companies.

Oasis has focused on improving Hokuetsu's corporate value for several years, announcing the "A Better Hokuetsu” campaign in October 2022 and “Hokuetsu Corp Gov” campaign on May 22, 2023. in response to the May 22, 2023 "Hokuetsu Corp Gov" campaign, on June 2, 2023, Hokuetsu issued " Hokuetsu Board of Directors’ Opinion on Oasis’ Presentation ". Subsequently, on June 12, 2023, Oasis issued a statement regarding the "Hokuetsu Board of Directors’ Opinion on Oasis’ Presentation," which included, among other things, a statement that Oasis received a whistleblower complaint from former Hokuetsu employee.

On June 14, 2023, Daio Kaiun Corporation ("Daio Kaiun") released an announcement (“the Announcement”) ( titled “Opinion on Hokuetsu’s Corporate Governance”.

In the Announcement, it became clear once again that Hokuetsu is in a confrontational relationship with Daio Paper:

Hokuetsu has continuously voted against the election of two directors, Mr. Masayoshi Sako and Mr. Toshihiro Adachi, at Daio Paper's annual general meeting of shareholders since 2013, until last year (the vote against Mr. Adachi has been held since 2017). The proposal to reappoint Mr. Masayoshi Sako as a director was withdrawn in advance last year, and we recognize that the anticipated vote against by Hokuetsu was a decisive factor in this decision.

Thus, Hokuetsu and Daio Paper, although the former owns 24.6% of the latter's outstanding shares, instead of collaborating in business, they have entered into a rivalry that can truly be called a relationship of “dog and monkey.” (Emphasis Oasis)

In the Announcement, Daio Kaiun notes that Hokuetsu is dysfunctional in terms of corporate governance due to Mr. Kishimoto's leadership:

Mr. Kishimoto became a director of Hokuetsu Corporation in June 1999, and was appointed President and Representative Director in April 2008. During the 15 years since Mr. Kishimoto became President and Representative Director, a total of 21 directors, excluding Mr. Kishimoto and outside directors, have served on the board, but 19 directors (excluding two) have already retired, and their average tenure is less than four years. It is not difficult to imagine how much power President Kishimoto holds in Hokuetsu Corporation's board of directors, given the length of his tenure and the age of the directors.

This has led to dysfunctional corporate governance at Hokuetsu and has caused many management problems. We have long opposed the proposal to reappoint Representative Director and President Kishimoto, and will again vote against it at this year's annual shareholders' meeting." (Emphasis Oasis)

The Announcement echoes our understanding of Hokuetsu's corporate governance issues. In particular, the fact that Hokuetsu has continued to oppose Daio Paper's president and representative director at past general shareholders' meetings is a clear indication that the relationship between the two companies is unlikely to improve as long as Mr. Kishimoto remains in his position as Hokuetsu's president.

In the Announcement, Daio Kaiun describes Hokuetsu's view on improving relations with Daio Paper as “abstract,” “dysfunctional” and a means of self-preservation:

Hokuetsu President and Representative Director Kishimoto, who for years has made no effort to improve relations with Daio Paper, and in fact has intensified the conflict, stated only in the abstract that he was exchanging views to improve relations as soon as the Oasis campaign was rolled out. This can only be seen as an attempt to cover up the inaction and dysfunction of corporate governance and to protect themselves. …(omission) ...Hokuetsu Corporation's abstract statement, made immediately after receiving Oasis presentation, that it was exchanging opinions with Daio Paper to improve relations, without any specifics, made us keenly aware once again of the dysfunctional nature of the Hokuetsu's corporate governance.”

This is in line with our understanding, and it is clear that Hokuetsu is acting in self-preservation by making abstract references on its relationship with Daio, which is problematic from a corporate governance perspective. Even though Hokuetsu has consistently opposed the appointment of Daio Paper's president and representative director, as soon as the situation turned unfavorable, Hokuetsu treated the deteriorating relationship as if the past did not exist, which is a true sign that Hokuetsu's corporate governance is not functioning.

In the Announcement, Daio Kaiun says that Hokuetsu and Daio Paper can become an even stronger company by creating synergies:

However, we believe that if both Hokuetsu and Daio Paper can strengthen their corporate governance and achieve sound management based on appropriate management strategies, they can survive in a severe economic environment with shrinking markets, demonstrate their unique meaning to exist, and meet the expectations of various stakeholders, including customers, employees, business partners, and local communities. ...(omission) ...And in the future, I hope that by working together to fill in the gaps, the two companies will grow into an even stronger company.

We believe that it is very important for Hokuetsu's future corporate value that Hokuetsu and Daio Paper move past their history and create positive synergies.

For this reason, we believe it is extremely important from a corporate governance perspective to vote AGAINST the reappointment of Mr. Kishimoto as President and Representative Director at this Annual General Meeting of Shareholders, who has been the cause of the deterioration of the relationship between Hokuetsu and Daio Paper.

It is very encouraging that, in response to our call and in order to improve Hokuetsu's governance, Daio Kaiun and Misuga Kaiun Kaisha, Ltd. which hold 10.0% of Hokuetsu's shares, plan to vote AGAINST Mr. Kishimoto's reappointment.

Hokuetsu's governance improvement depends on the decisions of each and every shareholder.

We call on all shareholders who care about improving Hokuetsu’s governance and corporate value to VOTE AGAINST the reappointment of Mr. Kishimoto as President and Representative Director at Hokuetsu’s AGM.

To learn more about Oasis’s proposals, please visit We welcome all stakeholders to contact Oasis at to help improve Hokuetsu’s Corp Gov through accountability now.

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 Oasis has adopted the Japan FSA’s “Principles of 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 Hokuetsu offered by Oasis, the investment manager to funds that are shareholders of Hokuetsu (the "Oasis Funds"). The Document is not intended to solicit or seek shareholders' agreements to jointly exercise any voting rights 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 under the Financial Instruments and Exchange Act. Oasis does not intend to be subjected to such notification requirement. The Document exclusively represents the opinions, interpretations, and estimates of Oasis.


For all inquiries:
Taylor Hall


For all inquiries:
Taylor Hall