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An independent Tokyo Radiator

OUR SHAREHOLDER PROPOSALS          Our Presentation

 

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

  • Shareholder Proposal 1: Return of ¥5.5bn cash held on deposit to parent company Marelli, and return it to shareholders as a special dividend
  • Shareholder Proposal 2: Transition to a company with an audit and supervisory committee to strengthen the supervisory function of the board of directors
  • Shareholder Proposal 3: Establishment of a nomination committee and a compensation committee, the majority of members to be comprised of outside directors
  • Shareholder Proposal 4: Introduction of restricted stock-based compensation system for directors (excluding outside directors)

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

Joe Bauernfreund
CEO & CIO, Asset Value Investors

AVI Japan Opportunity Trust

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