An activist is again pressing NAKANO FUDO CONSTRUCTION. A demand has been submitted to the directors and others concerning the provision for use without charge of a five-story building used as the residence of the founding family’s honorary chairman, alleging the provision of property benefits to a shareholder is an issue.
Toyo Keizai has learned that LIM Advisors, a Hong Kong investment fund, demanded by 21 October that NAKANO FUDO CONSTRUCTION bring suit against its directors and others. Efforts by the activist to press the company to pursue reforms are gaining momentum again.
The company owns the first through fourth floors of a five-story building in Gobancho, Chiyoda-ku, Tokyo. The top, fifth floor is used as a residence by Oshima Yoshikazu (大島義和), the honorary chairman from the founding family. The rooftop of the fourth floor, which leads to the honorary chairman’s residence, and passageways on the first floor, among other areas, are said to have been provided for use without charge, resulting in approximately ¥400 million in damage over the 10-year period from July 2015 to June 2025.
LIM argued that providing property for use without charge to Honorary Chairman Oshima constituted the provision of property benefits that obstructs the exercise of shareholders’ rights, and sought through a shareholder proposal to include in the articles of incorporation the disclosure of transaction details with the founding family. Attention will focus going forward on progress toward formally bringing suit against the directors and others, as well as the status of dialogue with shareholders.