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Asset Value Investors (AVI) Submits Shareholder Proposals to SK Kaken to Address Issues Caused by the Founding Family's Ambivalence Toward Minority Shareholders

·1-min read

SK Kaken's poor valuation and share price performance reflect the Board's ambivalence toward minority shareholders and their failing responsibilities as a listed company

SK Kaken barely meets the requirements to be listed on the Tokyo Stock Exchange

The founding family, who has control of the Board, seems to disregard minority shareholder's modest proposals to enhance corporate value

Poor governance is affecting SK Kaken's wider stakeholders with no environmental policy or target to reduce emissions

LONDON, May 23, 2022--(BUSINESS WIRE)--Asset Value Investors ("AVI") submitted shareholder proposals to SK Kaken Co., Ltd. (TYO 4628) ("SK Kaken" or the "Company") addressing six issues contributing to the Company's poor share price performance, low valuation, and potential delisting from the Tokyo Stock Exchange ("TSE").

A presentation outlining AVI's arguments and the full shareholder proposals are available at AVI's dedicated website

Joe Bauernfreund, CEO of AVI, comments: "SK Kaken's issues reflect a lack of urgency and weak management discipline, a symptom often encountered at a company with a controlling shareholder. Approximately 40% of SK Kaken's shares are owned by, and key senior executive positions are held by, members of the founding family.

"The average tenure of the SK Kaken board is 21 years, and the Founder has a major influence on the decision-making process. This leads to a culture of intransigence and traditionalism, starving the Company of progress including on environmental concerns that impacts wider stakeholders.

"We submitted shareholder proposals last year, seeking a 10-for-1 stock split and to cancel 90% of the outstanding treasury shares. Although general shareholders strongly endorsed both our proposals (55% and 57% respectively), it has fallen on deaf ears."

AVI has been a large minority shareholder and owner of SK Kaken for five years.

- End-

About Asset Value Investors (AVI)
AVI is a London-based investment management company that has been investing in Japanese equities for more than 20 years. AVI was established in 1985 and has been investing in the equity markets for more than 35 years. AVI's investment team is committed to contributing to sustainable improvements in corporate value by engaging with the management teams of its portfolio companies, with approximately ¥78bn invested in Japanese equities.

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Daniel Lee

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