Shareholders of Japan's LIXIL make rare demand for management ouster
20/03/2019 12:34
By Junko Fujita
TOKYO, March 20 (Reuters) - Four investment firms on
Wednesday called for the ouster of top management at Japanese
housing products maker LIXIL Group 5938.T , citing concerns
about corporate governance and marking a particularly vocal
stand by minority shareholders.
Marathon Asset Management, Indus Capital Partners and two
other firms called for an extraordinary shareholders' meeting to
have the company's chief executive and chief operating officer
dismissed from LIXIL's board.
The move comes as minority shareholders have become more
vocal about the management of Japanese companies following Prime
Minister Shinzo Abe's efforts to strengthen corporate
governance. Yet firms are often able to ignore the interests of
minority investors due to the longstanding practice of
cross-shareholding, where they hold stakes in each other to
cement business ties.
LIXIL in October appointed Yoichiro Ushioda as chief
executive and Hirokazu Yamanashi as chief operating officer
after Kinya Seto abruptly resigned as CEO. urn:newsml:reuters.com:*:nL3N1ZL0PZ
Seto's resignation and the appointment of the two "raised
concern whether proper due diligence was conducted in compliance
with the company's corporate governance code," the asset
managers, who also include Polar Capital Holdings Plc POLR.L
and Taiyo Pacific Partners LP, said in a statement.
"The institutional shareholders are taking extraordinary
measures to seek the dismissal of two members of the board and
consider further that they should voluntarily resign from the
positions of CEO and COO," they said.
A spokesman for LIXIL, Akihiko Fusegi, said the company had
not received a statement from the shareholders and would respond
appropriately once it confirms the request.
LIXIL was created in 2011 through a merger of five Japanese
building materials and housing companies, including Tostem and
INAX.
Separately, a member of INAX's founding family, Keichiro
Ina, said he backed the shareholders' push for an extraordinary
meeting.
As of September, 38 percent of LIXIL shareholders were
foreign institutions, while 7.2 percent of the company was held
by Japanese institutions, LIXIL's Fusegi said.
(Reporting by Junko Fujita; Editing by David Dolan and Emelia
Sithole-Matarise)
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