TOKYO, March 20 (Reuters) - Four investment firms on Wednesday called for the ouster of top management at Japanese housing products maker LIXIL Group, 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.
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 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)