Sparx calls for Teikoku Sen-i to raise dividend, cut directors' term
19/01/2018 06:00
* Rare shareholder proposal from Japanese fund manager
* First such action by Sparx in 11 years
* Sparx demands Teikoku triple dividend from current plan
* Also requests cutting board members' term to 1 year
TOKYO, Jan 19 (Reuters) - Japanese asset manager Sparx Asset
Management said on Friday it has sent shareholder proposals to
Teikoku Sen-i 3302.T requesting the Japanese textile company
increase dividend payment and shorten the term for directors.
This is only the second time the asset manager has ever
exercised its right to submit a shareholder proposal, as
shareholders grow more vocal following Prime Minister Shinzo
Abe's push to strengthen corporate governance.
Although some - mostly foreign - activist funds have issued
proposals to Japanese companies in the past, it is rare for a
manager of publicly-subscribed toshin funds to make such a move.
The asset management firm, the core company of Sparx Group
8739.T , said it decided to submit the proposal to Teikoku
Sen-i's annual general meeting, planned in late March, as four
years of its attempts at engagement with Teikoku's management
produced few notable changes.
Sparx said the manufacturer of fire hose and disaster-proof
products was stockpiling too much cash without a clear plan for
future investments and also owned cross-holding shares with
limited business synergy benefits.
The proposals include a plan to triple dividend payouts from
the current company estimate of 30 yen ($0.27) per share and to
halve board members' terms to one year. The latter is aimed at
putting more pressure on the company's management to take
shareholders' perspectives into consideration.
Sparx, which owns 6.1 percent of shares in the company
according to Thomson Reuters data, said it is planning to
consult with shareholder advisers and seek possible
collaboration with other institutional investors.
($1 = 110.8900 yen)
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MSCI JAPAN VS ACWI http://reut.rs/2jVPevr
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(Reporting by Tomo Uetake and Hideyuki Sano; Editing by
Jacqueline Wong)
((hideyuki.sano@thomsonreuters.com; +81 3 6441 1827; Reuters
Messaging: hideyuki.sano.thomsonreuters.com@reuters.net))
Keywords: JAPAN STOCKS/ACTIVISTS TEIKOKU SEN I