End Decades of Suspicious Related-Party Transactions with the Uchiyama Family
Protect Fujitec from President Uchiyama’s Abuse of Power
VOTE AGAINST PRESIDENT UCHIYAMA AT THE AGM
Please click here to view the Oasis investor presentation
In the interest of improvement of the corporate governance in Japan, Oasis highlights, in this website and presentation, Fujitec’s serious governance issues arising from numerous suspicious related-party transactions with the Uchiyama family’s companies. To date, the details surrounding these transactions have been unknown to shareholders or recent external directors. Oasis believes that shedding light on these numerous suspicious transactions would serve for the benefits of shareholders, employees, business partners, and all other stakeholders of Fujitec that desire to improve Fujitec’s corporate governance and pursue sustainable growth under the strong leadership of a Board of Directors.
A Long History of Suspicious Related-Party Transactions with the Uchiyama Family’s Companies
Elevator maker Fujitec Co. Ltd. (6406 JP) was founded by the legendary Shotaro Uchiyama in 1948. His son and current Chairman/President, Takakazu Uchiyama (“President Uchiyama”), assumed leadership in 2002.
Since then, Fujitec has fallen far behind its competitors, and has continued to lose market share, particularly in growth markets such as China and India where the Company has failed to aggressively expand. Unfortunately for Fujitec stakeholders, during this time, President Uchiyama has been focused on aggressively pursuing related-party transactions, which we believe have been conducted only for his and his family’s benefit.
Based on our due diligence and research of publicly available information, including public ownership registrations, company and government websites, filings and records, Oasis reasonably suspects that President Uchiyama, through his family’s private entities, has taken advantage of his position at Fujitec to personally benefit, to the detriment of all other stakeholders. We have so far identified the following examples of suspicious transactions:
- Fujitec acquiring an ultra-luxury apartment lent for the personal use of the Uchiyama family
- Fujitec purchasing failed personal investments made by President Uchiyama’s family companies and related entities
- Fujitec guaranteeing Uchiyama family entity debt and lending substantial capital, at times amounting to 20% of Fujitec’s cash on hand, to a President Uchiyama-related entity for a period of 11 years without any security
- Fujitec leasing real estate owned by Uchiyama family companies
- Fujitec selling its stake in an undisclosed company to a President Uchiyama-related entity without an open market auction or explanation provided to Fujitec shareholders
- President Uchiyama using what appears to be a Fujitec employee for gardening work at his home
The number and size of the related-party transactions at Fujitec is something Oasis has not seen before at a listed company, especially in Japan. This falls far short of the standards set for good corporate governance and fairness in Japan’s Corporate Governance Code. Some transactions potentially raise other issues regarding President Uchiyama’s fiduciary duty as representative director, and conflicts between the Uchiyama family and Fujitec shareholders.
Moreover, we believe that these governance abuses have gone on for well over a decade and have severely impacted the Company. Fujitec lending substantial capital to President Uchiyama-related entities for personal reasons set the Company back from making important capital investments that would have made Fujitec a stronger company today.
Oasis has raised many questions to Fujitec about these suspicious related-party transactions in letters and in-person meetings in order to give them an opportunity to explain.
However, to date, Fujitec has not provided Oasis with sufficient information to address those questions.
Oasis has been informed that an outside law firm has been recently engaged by Fujitec to conduct an investigation into some of the related-party transactions after Oasis repeatedly raised them to the Company. However, we believe that these suspicious transactions have gone on for too long, and Fujitec deserves more. President Uchiyama’s history of abuse of his position makes him unfit for reappointment as a director at the next AGM.
Fujitec stakeholders deserve accountability, better governance, and greater oversight. The Board also has responsibilities, as laid out in Japan’s Corporate Governance Code, to control transactions that involve a conflict-of-interest between the company and a director. We urge shareholders to send a strong message to Fujitec and all of Japan about the importance of corporate governance by voting against the reappointment of Uchiyama as a director. Below, we summarize the related-party transactions we have identified to date. For further details, a break-down of Uchiyama family related entities, and supporting evidence, please see our presentation here: