Oasis recommends that at the upcoming AGM, shareholders should:
1. VOTE AGAINST the nomination of Chairman Yasunori Sakurano
Failed to hit the targets set in the Medium-term Management Plan (FY2022/03-2024/03), with ordinary income achieving just JPY13 billion, compared with the budgeted JPY33 billion.
Operating profit and net income fell 16.8% and 20% below guidance for the FY2024/03, respectively.
ROE decreased from 15.2% in the year prior to Chairman Sakurano’s appointment to just 4.8% this year, the lowest in a decade and well below the 12% ROE forecasted in the prior Medium-term Management Plan.
The Company’s investments have destroyed value. In its last Medium-term Management Plan, Kumagai invested JPY17 billion but only generated income of JPY400 million, a return of just 0.78%, which is less than half of the Company’s 6% cost of capital.
2. VOTE AGAINST the nomination of Director Tatsuru Sato
Tatsuru Sato resigned remains a paid special adviser to Sumitomo Forestry despite resigning his directorship. This causes a substantial conflict-of-interest, as evidenced by Kumagai Gumi investing solely into Sumitomo Forestry’s overseas funds without examining other funds.
The capital alliance with Sumitomo Forestry has not generated meaningful synergies and there is no evidence that Kumagai will be able extract synergies in the next Medium-term Plan.
Sato does not have unique experience that is additive to the board as his expertise in administrative management is replicated by another board member, Koji Hidaka.
3. VOTE AGAINST the nomination of Director Shigeru Okada, Chair of the nomination and remuneration committee
Okada has repeatedly approved the renomination of Chairman Sakurano, despite his continued failure to hit targets during his time as president of Kumagai Gumi.
Okada has also approved the renomination of director Sato, who has a clear conflict-of-interest with Sumitomo Forestry and represents the failed capital alliance.
