Shareholders Support AVI Proposals At SK Kaken

Shareholders Support AVI Proposals At SK Kaken
freestocks-photos / Pixabay

General Shareholders Strongly Support Asset Value Investors’ (AVI) Proposals to Companies Controlled by Dominant Shareholders 

Get The Full Ray Dalio Series in PDF

Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q1 2021 hedge fund letters, conferences and more

London 02 July 2021 - Controlling shareholders defiantly voted to preserve their own interests to the detriment of general shareholders.

Engine No. 1’s Jennifer Grancio Talks Exxon And Current Opportunities In Value

investESG and sustainability remain hot topics in the world of investing, and activists are taking up positions in behemoths like Exxon Mobil. Engine No. 1, a sustainability-focused fund, ran a successful proxy campaign against the oil giant and won three board seats. At MarketWatch's Best New Ideas Money Festival last week, Jennifer Grancio of Engine Read More

A majority of general shareholders supported AVI proposals at SK Kaken.  

Strong Support For Proposals Submitted By AVI

Voting results from June-end AGMs show strong support by general shareholders for proposals submitted by Asset Value Investors (“AVI”). 

AVI submitted shareholder proposals to three companies -- Tokyo Radiator (TYO 7235), NS Solutions (TYO 2327) and SK Kaken (TYO 4628). All three companies are controlled by a dominant shareholder -- KKR-owned Marelli Corporation owns 40% of Tokyo Radiator, Nippon Steel owns 63% of NS Solutions, and founding Fujii family owns 40% of SK Kaken.

AVI submitted a combination of shareholder proposals to address poor capital allocation and governance typically associated with companies controlled by a dominant shareholder.

Leading proxy advisor Institutional Shareholder Services (“ISS”) broadly recommended votes FOR AVI’s proposals.

The dominant shareholder in each case voted AGAINST AVI’s proposals. AVI’s proposals sought to impose objective checks on the conflicts of interest created by “controlled company” structures and reform value destructive capital policies that favor dominant shareholders at the expense of general shareholders.

General shareholders were strongly supportive of AVI’s proposals.

General Shareholders At SK Kaken Voted FOR AVI’s Proposals

At SK Kaken, a majority of general shareholders (i.e. shareholders other than inside and strategic shareholders (including the founding Fujii family)) voted FOR AVI’s proposals for a 10-for-1 stock split and cancellation of treasury shares to improve liquidity.

A majority of SK Kaken general shareholders also voted AGAINST re-electing Statutory Auditor Shoji Hamano. ISS recommended AGAINST this candidate because of lack of independence.

At Tokyo Radiator, one in four general shareholders voted FOR AVI’s proposals to return to shareholders ¥5.5 billion in idle cash on deposit with controlling shareholder Marelli.

Proposals to establish a Nomination and Compensation Committee to bring greater independence and an incentive compensation system for senior management to better align management and shareholder interests received the same level of support from general shareholders.

At NS Solutions, AVI’s three proposals for a modest dividend, share buyback, and establishment of a performance-linked executive incentive compensation system were approved by 39%, 33% and 29% of general shareholders.

AVI CEO Joe Bauernfreund commented: “The controlling shareholders voted against AVI’s proposals in defiance of Japanese government guidelines requiring special measures to protect against the abuses inherent in controlled companies. 

“Investors will continue to discount controlled company stocks deeply as long as dominant shareholders are permitted to treat them as convenient servant companies.” 

Details of voting results for each proposal are shown in the charts below.

​Tokyo Radiator: AGM June 25, 2021



(a) Return of ¥5.5bn cash held on deposit to parent company Marelli, and return it to shareholders as a special dividend 25 %
(b) Transition to a company with an audit and supervisory committee to strengthen the supervisory function of the board of directors 23 %
(c) Establishment of a nomination committee and a compensation committee, the majority of members to be comprised of outside directors 25 %
(d) Introduction of restricted stock-based compensation system for directors (excluding outside directors) 25 %

1  AVI estimate. Percentage of votes approved, assuming that all voting rights held by Marelli Corporation were cast against the proposals and excluding those negative votes.  

NS Solutions: AGM June 18, 2021



(a) A final-year dividend of ¥62 per share, for a total dividend of ¥87, in reaction to NSSOL’s proposal to reduce the dividend from ¥65 last year to ¥52.5 this year, the first dividend decline since 2009  39 %
(b) A share buyback, to be funded by disposition of excessive “strategic shares”, to reduce the share ratio of NSSOL’s controlling 63.4% shareholder Nippon Steel Corporation to 61.1%, a level that will help to meet the Tokyo Stock Exchange’s new 35% free float requirement  33 %
(c) The introduction of stock-based compensation for directors  29 %

2  AVI estimate. Percentage of votes approved, assuming that all voting rights held by Nippon Steel were cast against the proposals and excluding those negative votes.   

SK Kaken: AGM June 29, 2021



(a) 10-for-1 stock split 55 %
(b) Treasury share cancellation 57 %

1  AVI estimate. Percentage of votes approved, assuming that all voting rights held by inside and strategic shareholders such as Shikoku Kosan, Kansai Mirai Bank, Mr Fujii Minoru, Mr Fujii Kunihiro, Mr Fujii Mitsuhiro, SK Kaken Mutual Prosperity Association and Mr Sakamoto Masahide were cast against the proposals and excluding those negative votes.

Jacob Wolinsky is the founder of, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at) - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
Previous article Virgin Galactic Developing Missile Technology to Shoot Down Bezos’ Aircraft
Next article Second $600 coronavirus stimulus checks from California: who will get them and when?

No posts to display