Proposal for SNT Corporation’s 76th General Shareholders Meeting
HONG KONG, March 23 /Xinhua-PRNewswire/ -- Safe Harbor Investment Ltd. (hereafter “Safe Harbor Investment”) announced that Safe Harbor Master Fund L.P. (hereafter “Safe Harbor Fund”), has submitted a shareholder proposal to add two outside directors, Tetsuo Fujikawa, currently director and ex chief financial officer of Niles Co. Ltd., and Kohsuke Noda, currently Representative Director of HartBay Capital and a Vice Chairman and Director of IB Daiwa, to SNT Corporation’s board of directors.
This shareholder proposal follows a previous proposal submitted to SNT Corporation (TYO: 6319) by Safe Harbor Fund on March 13th which proposes an increase in the annual dividend. Safe Harbor Investment believes the addition of two outside board members with strong industry and capital markets expertise will help SNT Corporation develop a medium to long-term business strategy to respond to changes in the company’s dynamic competitive environment and help management improve the company’s corporate value for the common benefit of all shareholders.
In November 2006, Safe Harbor Investment proposed a three-part plan to the President of SNT Corporation that it believes is in the best interests of the company and would improve corporate value for the benefit of all shareholders. Safe Harbor Investment’s outside director nominees will be able to make valuable contributions towards implementing this plan.
The plan includes the following key tenets:
Creation of a Proper Medium to Long-Term Business Plan. Safe Harbor believes that SNT Corporation should produce a well constructed business plan with sales and profit goals for the next three to five years, examine medium-term issues in the labor market that may face the company, properly define a capital expenditures plan and make sure the capital expenditures fit with the company’s ROE target goals. SNT Corporation should also consider alliance relationships in response to the dynamic competitive environment in the auto parts industry.
Creation and Implementation of a Succession Plan. Safe Harbor Investment notes that the current President of SNT Corporation is eighty years of age and that the company has not named any capable successor. While SNT Corporation enjoys a strong place in the auto parts industry today, in the medium to long term, dynamic leadership with a strong understanding of the auto parts industry is necessary to respond to changes in the company’s competitive environment and ensure SNT Corporation’s long term success. Safe Harbor Investment believes that having a succession plan is essential for any publicly traded company, particularly SNT Corporation.
Monitoring of Non-Core Investments. As of December 31, 2006, SNT Corporation has Y3,316 million of short term loans to unidentified recipients and an approximately Y2,000 million real estate investment on its balance sheet that it made in fourth quarter of FY 3/2005. These investments are approximately, 16% of total consolidated assets, 24% of consolidated shareholders equity and 24% of SNT Corporation’s current market capitalization as of March 22, 2007. Safe Harbor Investment believes that such investments may not be appropriate and create substantial risks to the company without proper risk management. In order to improve ROE and reduce risks to the company, it may be better to liquidate these assets and return the capital to shareholders.
Enhancement of Stock Option Program and Employee Benefits. Given the shortage of engineering labor in Japan in the medium to long term, Safe Harbor Investment believes modern management techniques should be implemented to incentivize and motivate SNT Corporation’s employees. This includes aligning employees’ interests with shareholders’ interests potentially through a properly structured stock option program and implementing modest capital expenditures to improve the factory working environment.
Better Medium Term Asset Efficiency. While Safe Harbor Investment believes that the 70 yen per share dividend it has proposed will help SNT Corporation towards its goal of 8% ROE, greater asset efficiency is still needed in order to achieve the goal. This includes setting a dividend pay-out ratio, improving working capital management, implementing a proper mix between debt and equity and analyzing the potential sell-down of long term investments.
Improved Investor Communication. Safe Harbor Investment believes that a publicly traded company has a duty to disclose information in a transparent and readily understandable manner. Safe Harbor Investment therefore believes that better disclosure in SNT Corporation’s Tanshin and Yuho reports, particularly with regard to the non-core investments; a designated investor relations manager; continuous investor relations presentations and materials; and one on one meetings and analyst presentations are important for any publicly traded company to implement.
Safe Harbor Investment has a very high regard for SNT Corporation and its employees. It believes that its outside director nominees will be essential for better corporate governance of SNT Corporation, which currently does not name any outside directors, and that these directors will be able to make valuable contributions and work with the current directors for the benefit of the company and in the common interest of all shareholders.
For further information and updates, please visit the website: www.safeharbor-investment.com
About Safe Harbor Investment, Ltd
The funds managed by Safe Harbor Investment Ltd. invest primarily in the securities of Japanese companies. Safe Harbor Investment Ltd, is the investment manager for Safe Harbor Master Fund L.P., an entity that beneficially owns shares of SNT’s common stock.
IMPORTANT NOTE: This press release (hereafter “Release”) is not an offer to acquire shares nor an invitation to tender shares in SNT Corporation and is not intended to solicit any shareholder to retain the fund or any party related thereto or any other third party as its/his proxy in exercising its/his voting rights at any general meeting of the shareholders of SNT Corporation, nor to provide any advice in connection with the exercising of the voting rights by any shareholder. This Release is based on information available to Safe Harbor Investment as of the date of this Release. While Safe Harbor Investment has exercised reasonable care as to the information in this Release, Safe Harbor Investment makes no representation or warranty as to the accuracy or completeness of the information contained herein. Further, Safe Harbor Investment, makes no representation or warranty as to the result of the resolution in respect of the proposal. Safe Harbor Investment, on Safe Harbor Fund’s behalf, also reserves the right to withdraw or amend its proposal as circumstances change.
This Release is not intended to have an effect on the share price of SNT Corporation. Safe Harbor Investment and Safe Harbor Fund assume no responsibility as to any reaction from the market in response to the proposals or views expressed by the management of SNT Corporation. The proposals are intended solely to introduce the subject matter of the proposals for consideration by SNT Corporation’s shareholders at the General Shareholders’ Meeting.
SUPPLEMENTAL MATERIAL
Tetsuo Fujikawa
Tetsuo Fujikawa is currently director and ex representative executive officer and chief financial officer of Niles Co. Ltd, an automotive electrical parts manufacturer. He will be retiring from his director’s position in June. Mr. Fujikawa would bring impressive auto industry experience to SNT Corporation through his more than 25 years of experiences working for Mitsubishi Corporation and related companies. Mr. Fujikawa’s range of experience includes restructuring of corporate organizations; establishing new companies and joint ventures; auto manufacturer relationships and international auto industry experiences. Mr. Fujikawa graduated from Doshisha University in Kyoto and obtained the Canadian Certified Accountant degree in 1974.
Mr. Fujikawa established Mitsubishi Motor Sales Europe B.V. in the Netherlands from initial set-up to full operation, restructured Mitsubishi Fuso Truck of America and reestablished the company as a profitable operation, established Spaceport Systems Corporation for Mitsubishi Corporation from initial set-up to full operation; and established the Malaysian National Car Company in Malaysia from initial set-up to full manufacturing operation.
Utilizing his managerial experience, Mr. Fujikawa would be able to develop and promote capable managers within the company. As Mr. Fujikawa has very strong auto industry experience and relationships, he could help identify a possible successor from outside as well.
Mr. Fujikawa also has strong financial management experience. He will be able to properly study and examine SNT Corporation’s non-core investments; examine whether this is a proper use of SNT Corporation’s capital and potentially propose returning this capital to shareholders; and help make sure that these non-core investments do not pose a threat to SNT Corporation’s long term future.
Throughout much of his career, Mr. Fujikawa has worked with option incentive programs and accepts the premise that shareholders and employees goals should be aligned. He will be able to educate the board on the merits of such systems and provide advice based on his past experiences on how to best implement such a program.
Mr. Fujikawa shares Safe Harbor Investment’s vision of asset efficiency. He has created and managed businesses focused around return on assets and on equity.
Finally, Mr. Fujikawa understands how a publicly traded company should communicate to investors and would seek to work with management to improve transparency and disclosure for the benefit of SNT Corporation’s shareholders.
Kohsuke Noda
Kohsuke Noda is currently Representative Director of HartBay Capital and a Vice Chairman and Director of IB Daiwa. Mr. Noda brings more than 25 years of financial and capital markets experience at Nomura Securities and other firms where he was mostly involved in international investment banking with posts in New York, Hong Kong, and San Francisco. Mr. Noda graduated from Keio University and Johns Hopkins University majoring in International Economics.
Mr. Noda will be able to utilize his extensive experience in mergers and acquisitions to help identify, negotiate and execute alliance relationships on behalf of SNT Corporation.
He has an extensive network of professional contacts within Japanese companies and would be able to identify and recruit capable executives for SNT Corporation.
Mr. Noda has strong financial management experience. He will be able to properly study and examine SNT Corporation’s non-core investments; examine whether this is a proper use of SNT Corporation’s capital and potentially propose returning this capital to shareholders; and help make sure that these non-core investments do not pose a threat to SNT Corporation’s long term future.
Throughout much of his career, Mr. Noda has worked with option incentive programs and accepts the premise that shareholders and employees goals should be aligned. He will be able to educate the board on the merits of such systems and provide advice based on his past experiences on how to best implement such a program.
Mr. Noda shares Safe Harbor Investment’s vision of asset efficiency. He helped create and implement an extensive asset efficiency program at I B Daiwa Corporation.
Finally, Mr. Noda understands how a publicly traded company should communicate to investors and would seek to work with management to improve transparency and disclosure for the benefit of SNT Corporation’s shareholders. Mr. Noda, as director of IB Daiwa, has implemented investor communication programs in his capacity as a director.
ATTACHMENT:
CONDENSED VERSION OF SHAREHOLDER PROPOSAL TO SNT CORPORATION
(Translation of Original)
Name: Tetsuo Fujikawa
Date of Birth: May 1, 1942
Experience:
1965 Doshisha University in Kyoto, Bachelor of Economics
1974 Certified General Accountant of B.C. & Canada
1967 Crestbrook Forest Industries / British Columbia, Canada
1973 Mitsubishi Canada Ltd. / Vancouver, Canada
1980 Mitsubishi Corporation, Motor Vehicle Division / Tokyo
1984 Malaysian National Car Company (PROTON) / Kuala Lumpur,
GM of Procurement & Local Content
1986 Mitsubishi Corporation, Motor Vehicle Division / Tokyo
International Project Manager
1988 Spaceport Systems Corporation / California, President
1990 Mitsubishi Fuso Truck of America / New Jersey
Executive Vice President, CFO/CAO
1993 Mitsubishi Motors Sales Europe B.V. / Amsterdam
Executive Vice President, CFO/CAO
1997 Mitsubishi Motors Australia Limited / Adelaide, Australia,
Deputy Managing Director, CFO/CAO
2002 Niles Co Ltd./ Tokyo
Director and Executive Officer, CFO
2006 Director and Representative Executive Officer, CFO
2007 Non-executive Director (current)
Name: Kohsuke Noda
Date of Birth: August 2, 1957
Experience:
1980 Keio University in Tokyo, Bachelor of Science Degree, Economics
1985 Johns Hopkins University, School of Advanced International Study
in Washington, DC, MA in International Economics
1980 Nomura Securities / Tokyo
1985 Nomura Securities International / New York
1988 Nomura Securities / Tokyo, Syndicate and New Product Department
1993 Nomura International (Hong Kong) / Hong Kong,
Investment Banking Department, Executive Director
1995 Nomura Securities / Tokyo
Overseas Project Department, Deputy General Manager
Corporate Finance Department 2, Deputy General Manager
Corporate Finance Department 4, General Manager
Investment Banking Department 4, General Manager
2002 Thomas Weisel Partners / San Francisco, Managing Director
2003 Nomura Securities International / New York,
Executive Vice President
2004 HartBay Capital / Tokyo, Representative Director (current)
2005 IB Daiwa Corporation / Tokyo, Director, Vice Chairman (current)
(Reason for Nomination)
Tetsuo Fujikawa is currently director and ex representative executive officer and chief financial officer of Niles Co. Ltd, an automotive electrical parts manufacturer. Mr. Fujikawa has more than twenty five years of experience in the automotive industry, both domestically and internationally, including in Mitsubishi Corporation and Mitsubishi Motors related companies (See the biography above). Mr. Fujikawa managed automobile assembly companies as well as auto parts manufacturers. He understands the businesses of both SNT Corporation’s customers and the auto parts industry. Mr. Fujikawa’s wide range of practical experience includes establishing new business, restructuring of corporate organizations and corporate rehabilitation. With his international business experience, Mr. Fujikawa would be able to contribute to the business and operations of SNT Corporation (“SNT”) directly.
Kohsuke Noda is currently Representative Director of HartBay Capital and a Vice Chairman and Director of IB Daiwa, a corporation which is listed on JASDAQ and engaged in investment business related to natural resources. Mr. Noda brings more than twenty five years of financial, capital markets and investment banking experience at Nomura Securities and its associated companies (See the biography above). His strong financial management experience will directly contribute to the risk management in the non-core short-term lending and real estate investment by SNT. He has an extensive network of professional contacts within Japanese companies and would be able to identify and recruit capable executives for SNT. Mr. Noda will be able to utilize his extensive experience and international network to help identify, negotiate and execute alliance relationships in mergers and acquisitions on behalf of SNT.
Mr. Fujikawa and Mr. Noda share the vision as to how a publicly traded company should behave, such as enhancement of asset/capital efficiency (ROE), development of corporate value through incentive programs, investor relations and disclosure policy. In addition, Mr. Fujikawa and Mr. Noda are very enthusiastic about improving SNT’s mid and long term corporate value by enhancing corporate governance for SNT including its employees and customers and in the common interest of all shareholders.
Therefore, Mr. Fujikawa and Mr. Noda should be appointed as directors of SNT. They can then work with SNT’s existing management to improve corporate governance for the benefit of SNT and all its shareholders.
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