Dear fellow shareholders of Tokyo Radiator,
AVI has been a shareholder of Tokyo Radiator for nearly four years. We have been in communication with Tokyo Radiator to increase its corporate value, especially to resolve conflicts of interests between KKR-owned Marelli, Tokyo Radiator’s controlling shareholder, and minority shareholders.
It goes without saying that KKR is fully aware of Tokyo Radiator’s listed subsidiary status and, by maintaining the structure and having a disproportionate influence, is at fault for the failure to protect minority shareholders. The President of Tokyo Radiator is assigned from KKR-owned Marelli, raising questions about whose interests are more important for Tokyo Radiator—those of its controlling shareholder or those of general shareholders.
Tokyo Radiator has idle cash of ¥9.9bn, which exceeds its market capitalisation. Over half of the ¥9.9bn is inappropriately deposited with its controlling shareholder Marelli. AVI has made shareholder proposals to strengthen the protection of minority shareholders and address the issues caused by its “listed subsidiary” status
We hope that our fellow shareholders will support these proposals. Other shareholders who share our views are encouraged to communicate their views.
18th May 2021
CEO & CIO, Asset Value Investors
* As at 31 May 2021
** Source: Morningstar, performance period 23 October 2018 to 31 May 2021, TR net of fees, GBP
*** As at 30 September 2020, includes: management fee 1.0%, marketing and administration costs.
AVI Japan Opportunity Trust p.l.c is referred to as ‘AJOT’ throughout the website. AJOT’s investment managers, Asset Value Investors are referred to as ‘AVI’