The Washington Post: ”A Maverick Founder Wins Enemies in Japan With Move to Dump Board”

A excerpt from an article on the somewhat unique situation at Cookpad. We don’t think we have seen a story like this before, at least not recently.

”(Bloomberg) — A spat is rocking one of Japan’s most popular Internet companies after the founder moved to kick out the board, enraging staff and sending shares tumbling.

Akimitsu Sano, who owns 44 percent of Cookpad Inc., shocked investors in January by calling on them to dump all other directors of the recipe-sharing site, saying the company was neglecting its main business. The stock fell 23 percent in one day and has whipsawed with each new skirmish in a battle to control a firm with more than 85 million monthly website users.

Facing exile, as Sano’s stake in effect meant he could unilaterally replace them, the then board sought to negotiate a compromise, and by February reached an agreement for some members to retain roles. Nine directors — Sano, five of his picks and three others from the previous board — were anointed by shareholders at the annual meeting in March.

While that averted a proxy fight, the seismic shocks from the incident continue to reverberate. Institutional Shareholder Services Inc., the influential proxy adviser, urged clients to vote against Sano’s re-election as a director. More than 80 percent of Japanese staff signed a petition expressing discontent with the situation. Analysts, meanwhile, say the previous board was doing a good job, and they’re worried about the future.

“It’s a real shame,” said Takahiro Kazahaya, who covers Cookpad for Deutsche Bank AG in Tokyo and downgraded the shares to hold from buy this year. “The company has lost a lot of value. It’s not something the market can respect. There are too many problems. Why did the founder have to make such a proposal?……………”

Read full article here.

Source: The Washington Post with Bloomberg

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