Shareholders Accuse Founding Family! Rough Meeting of Elevator Giant’s Shareholders Expected
A Hong Kong fund, a shareholder, accuses the founder of Fujitec, a major elevator manufacturer in Japan.
An ultra-luxury condominium in a prime location in Minato Ward, Tokyo. It is conveniently located about a 5-minute walk from the nearest station, after passing through the local shopping district and climbing a slope. It is a stately structure with red brick tiles reminiscent of the bubble era. As there are many embassies of various countries in the area, many foreigners, who appear to be related to the company, can be seen in the building.
This luxury condominium is attracting attention as a possible “bomb” that could shake up a certain company’s general shareholders meeting.
The company is Fujitec, a major elevator and escalator manufacturer listed on the prime section of the Tokyo Stock Exchange (formerly the First Section of the Tokyo Stock Exchange). Since last month, “Oasis Management,” a Hong Kong-based fund, has been talking about the campaign for the resignation of President Koichi Uchiyama from the board of directors of Fujitec by launching a special website calling for “voting against President Uchiyama at the annual shareholders’ meeting and protecting Fujitec.
Oasis is currently a major shareholder holding approximately 9.7% of Fujitec’s shares, and claims that the ultra-luxury condominium introduced at the beginning of this site has been used for private purposes by the founding family, including President Uchiyama.
The following are the accusations made in the presentation material uploaded on the Oasis website.
Fujitec acquired one of the apartments in this Minato-ku condominium in February ’13, with an area of 426.44 m2, monthly rent of approximately 2.5 million yen, and a current market value estimated at over 700 million yen. Six months after the acquisition by Fujitec, President Uchiyama’s wife entered the location of the condominium as her domicile in the registry. In July 2003, President Uchiyama’s son, who works for Fujitec, also entered the location of the condominium as his own address in the corporate registry of the family’s asset management company, which he owns. Subsequently, the condominium was sold by Fujitec to the son’s asset management company in June ’21.
When Oasis asked Fujitec about the condominium, Fujitec replied that the condominium was operated as a company guest house and company housing for executives for the purpose of strengthening top sales to enhance the company’s status in the Tokyo metropolitan area, but there was no explanation about the fact that the wife and son were listed as the address in the corporate registry. However, there was no explanation about the fact that his wife and son were listed in the registry as his address.
Oasis claims that Fujitec’s explanation lacks rationality because the wife is not a Fujitec employee, and the son is also a young employee who is not a board member, and he also used his address when he worked as a branch manager in Chiba, which is 90 minutes by public transportation from the condominium.
Furthermore, he points out that if his wife and son were using the condominium for personal use, they would be required to pay Fujitec an extremely high rent, estimated to be about 30 million yen per year, but this amount is not stated in the securities report required by the Companies Act. The report pointed out that there is no mention of this in the securities report required by the Companies Act.’ When the condominium was sold by Fujitec to his son’s asset management company in 2009, it was allegedly sold at a discount to market price.
In addition to this condominium, Oasis also accuses President Uchiyama of allegedly using Fujitec employees for personal use to clean his home in Hyogo Prefecture, based on its own investigation, with photographs.
Immediately after this Oasis campaign began, Fujitec issued a press release denying all allegations, saying that the allegations were “completely false or based on factual errors” and that the transactions in question “were all legal and appropriate transactions and actions conducted in accordance with prescribed laws, regulations, and procedures, and there are no problems in terms of corporate governance. The company has also issued a press release denying all the transactions and stating that “all of them are legal and appropriate transactions and actions conducted in accordance with the prescribed laws and procedures, and there are no problems with corporate governance.
A securities industry insider analyzes Oasis’ campaign as follows: “An activist such as Oasis has been making a lot of money.
It is not unusual for activists like Oasis to criticize management and point out problems as “shareholders who speak their minds,” but this time they are doing it with an eye to shaping public opinion on the Internet, which is both novel and impactful.
In the past, it was common to appeal to public opinion by holding press conferences for old media such as newspapers and television, but this time, Oasis opened a special website and uploaded presentation materials based on its own research, making it easy to spread the information via social networking services such as Twitter. Oasis has opened a special website and uploaded presentation materials based on its own research, making it easy to spread through social networking sites such as Twitter.
Of course, as an activist, Oasis basically wants shareholders to agree with its opposition to the reappointment of Mr. Uchiyama, but if netizens make a fuss about it, such as “It is outrageous that he abuses his authority to live in such a nice apartment,” and “It is like a servant to have his employees clean his house,” it will be difficult for shareholders to ignore the public opinion. If public opinion is raised, it will be difficult for the shareholders to ignore the accusations.
Fujitec has issued a release denying the accusations, but with such detailed information, other shareholders will not be able to ignore them. The general meeting of shareholders is expected to be contentious.
Fujitec is a listed company on the prime market of the Tokyo Stock Exchange and is supported by a large number of shareholders, so Fujitec’s general shareholders meeting on June 23 is likely to be a turbulent affair.
(Reporting and writing by Yuji Ebisuoka, freelance journalist)
Interview and text by： Yuji Ebisuoka
