Activist Fund Oasis Eyes Kyocera, Canon After Nintendo Win

Oasis Management, the Hong Kong-based activist fund that called for the changes unveiled last month by Nintendo Co., is turning its attention to Kyocera Corp. and Canon Inc.

Oasis owns about 1 percent of Kyocera’s voting rights, according to a letter to the fund’s investors obtained by Bloomberg. It’s urging the Kyoto-based manufacturer to return cash to shareholders by selling its stake in Japan Airlines Co. and “greatly” reducing holdings of KDDI Corp., and to restructure its solar business, the March 26 letter says. Oasis is calling for Canon to take private two listed subsidiaries.

Oasis is the latest fund to push for change at Japanese companies, after Daniel Loeb’s Third Point pressed robot-maker Fanuc Corp. in February to buy back shares and communicate more with investors. Seth Fischer, founder and chief investment officer of Oasis, writes in the letter that businesses are more receptive to ways to boost returns as the government takes steps to improve corporate governance.

“Why do we think they will listen to us? We are not the first investor to ask,” Fischer writes in the letter, referring to Kyocera. “This time, however, it is not just us as foreign investors who are asking but the full force of the domestic establishment.”

Prime Minister Shinzo Abe is seeking to increase return on equity at Japan’s companies. The nation introduced a stewardship code last year, intended to get institutional investors to urge companies to use capital more efficiently. The regulator and the Tokyo bourse are starting a governance code for companies in June to complement these principles. A government-backed stock index that picks members for their ROE and profitability began in 2014.

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The Board Director Training Institute (BDTI) is a "public interest" nonprofit in Japan dedicated to training about directorship, corporate governance, and related management techniques. It is certified by the Japanese government to conduct these activities as a regulated nonprofit. Read a summary about BDTI here, and see a menu of its services for both corporations and investors here.

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