In
Japan, greater governance activism on the part of investment funds. This article comes
from Japan and highlights a more activist institutional investor. Years
ago, Peter Drucker predicted the rise of institutional shareholder
activism. It appears to be happening in japan. Murakami Fund
demands majority of Hanshin board members The
Yomiuri Shimbun The
Murakami Fund, an investment fund led by financier Yoshiaki Murakami, said
Tuesday it had urged Hanshin Electric Railway Co. to include nine persons of
the fund's choice in the railway firm's 16-member board at a shareholders
meeting on June 29. Hanshin Electric
Railway has strongly opposed the proposal, maintaining the fund's move is
intended to gain control of the railway firm's management. Hanshin Electric
has not decided whether to include the proposal in the meeting agenda. The Murakami Fund
held a 45.73 percent stake in Hanshin Electric Railway as of Feb. 22.
According to the proposal, Murakami himself would be one of the eight board
members. In the proposal,
the fund requests nine people--eight chosen by the fund and Eiji Tamai, an
external board member at Hanshin and special adviser to Sumitomo Mitsui Card
Co.--be appointed board members. At the meeting,
Hanshin intends to request nine board members, whose terms are expiring, be
reelected. If the fund
rejects the request and approves its own proposal, the 16 board members will
include eight from the current management team and eight from the fund. As a condition for
withdrawing the proposal, the fund requested that Hanshin submit a measure at
the meeting to halve the number of board members to eight, which would be
formed from three Hanshin choices, Tamai and four people recommended by the
fund. Because the fund
has a de facto majority of shareholder voting rights, it could approve its
proposal by itself at the meeting. Hanshin released a
statement Tuesday night saying the proposal is aimed at having board members
designated by the fund account for a majority of the board. It also criticized
the fund for seeking to grab control of the firm's management. Regarding requests
made by the fund during negotiations since September, such as splitting the
real estate business from the firm and listing the Hanshin Tigers
professional baseball team, Hanshin reiterated that integrated management as
a group would be necessary. It also said it
would bring forward discussions on management integration with Hankyu
Holdings Inc., which attempted to obtain Hanshin shares through a takeover
bid. |