Dalton Investments has
proposed the election of its founder James Rosenwald to the board of Japanese
company Shinsei Bank, stepping up its campaign at the troubled Japanese bank.
Rosenwald, whose Dalton owns 6% in Shinsei, said in a public release [businesswire.com] the bank needs
“to strengthen its commitment to building value for all shareholders,
especially the taxpayers of Japan, who saved the bank.”
Shinsei is the only bank in Japan that has not repaid the government for the
banking crisis bailout. Japan wants to receive 350 billion yen ($3.1 billion)
when it sells its 18% stake in Shinsei.
“If elected to the board, I intend to work every day to enhance the value
of the shares,” Rosenwald said.
In March, Dalton sent a letter to Shinsei and asked for a massive share
buyback, saying its proposal would help boost the stock price to 7,450 yen, a
level that would allow it to repay the government. Shinsei stock was down 3% at
closing on Thursday in Tokyo to 1,484 yen.
“Our goals are simple: we want to make Shinsei the safest,
best-capitalized large bank in Japan, and to create a financial foundation that
makes possible the repayment of taxpayers in whole and improves return on
equity. The best way to accomplish these goals is by selling assets, shrinking
the company, and using excess capital to buy back shares,” Rosenwald said
Thursday.
Although Rosenwald praised the company for recently launching a stock
repurchase program, he said the plan “needs to proceed at a much faster
pace if the taxpayer is to be repaid in full.” He said the bank needs to
avoid joint ventures with other banks and instead focus first on its own
balance sheet.
The annual meeting is expected to take place on June 19. Rosenwald said his
director fee will be 1 yen per share until taxpayers are paid in full.
Last year, Dalton advanced a proposal seeking to align executive remuneration
with shareholder returns. It failed to pass but 25% of the shares present were
voted in favor.
