A Governance Committee formed by Japan’s Universal Entertainment Corp (UEC) for the purpose of advising on the company’s governance structure and compliance processes has recommended greater separation from parent company Okada Holdings Ltd due to an ongoing Okada family dispute.
Reducing the impact of the major shareholder was one of seven recommendations from the Governance Committee put to UEC’s Board of Directors last week.
It states, “The dispute over the control of Okada Holdings Limited, the holding company that owns approximately 70% of UEC’s shares, has not been resolved. The dispute should be separated from the business management of UEC.”
Okada Holdings is entirely owned by the Okada family but is controlled by UEC’s Representative Director and President Tomohiro Okada thanks to his 53.27% stake, while his estranged father Kazuo Okada holds the majority of the remaining stake.
UEC decided to form the Governance Committee – comprising two non-executive directors and an external auditor – last September in an effort to avoid the sort of compliance breaches that have led to the ousting of former chairmen Kazuo Okada and Jun Fujimoto in recent years.
However, just how effective the recommendations will be remains to be seen given that one of the seven simply states, “Reduction of the Number of Lawsuits”.
UEC itself, in making the seven recommendations public, said there also appear to be “some factual errors” surrounding the assumptions of the recommendations “and the grounds for the findings are unclear”, adding that Tomohiro Okada has questioned these issues to the Governance Committee without response.
UEC said some of the recommendations are “conclusory” and “do not necessarily represent an accurate understanding of UEC’s problems” but that it takes them seriously anyway.
The other recommendations include formulation of a medium-to-long-term business plan, improved Human Resources measures such as establishment of a new HR department separate from the existing Administration Department, and establishment of a to ensure appropriate report and communication from key executives in both Japan and overseas.
UEC is a leading developer of pachinko and pachislot machines and is also the parent company of Philippine integrated resort Okada Manila.
RelatedPosts
