Highlights from the world 
of Proxy Papers you can’t afford to miss: Takata, Omega Protein, Rizal and Asahi Kasei.
Takata Corporation
Tokyo Stock Exchange – June 28
The chorus of complaints related to Takata Corporation’s defective airbags appears to be reaching a crescendo in advance of the Company’s annual meeting — as have criticisms concerning the Company’s response to these problems. The airbag issues have already resulted in a consent order from the U.S. National Highway Traffic Safety Administration, which included a $200 million penalty – the largest in the NHTSA’s history. In addition, several automakers, including Ford, Honda, Nissan and Toyota, ceased the use of the Company’s inflators in their cars, trucks and SUVs, in no small part as a result of least 11 deaths and more than 100 injuries from airbag ruptures. Based on recent findings, the airbag recall has expanded to cover approximately 70 million units total worldwide, and just this week Fiat Chrysler joined the list of automakers seeking other vendors. Despite the largest automotive recall in history and the Company’s criticized responses, Mr. Shigehisa Takada, representative director, president and chairman of the Company, earned a 91% affirmative vote from shareholders at the 2015 annual meeting – reflecting Mr. Takada and his family’s majority stake in the firm. As such, his re-appointment, as well as the passage of the other management proposals, is all but guaranteed. However, he will have to face tough questions about both the recall itself and the Company’s strategy going forward, and it would not be surprising if many outside shareholders who supported Mr. Takada in 2015 reverse their course at the upcoming annual meeting.
Omega Protein Corporation
New York Stock Exchange – June 28
Under the stewardship of CEO Bret Scholtes, Omega Protein has, for the last several years, attempted to diversify away from its historically tight focus on animal nutrition products, in part by allocating a significant amount of capital toward the development of a new human nutrition business. However, following a string of losses, sagging margins and a lack of segment-level transparency, Wynnefield Capital, Inc., the owner of 7.9% of the Company’s issued share capital, has determined to press for minority board change intended to support a further review of the Company’s strategic direction and oversight architecture. The board’s response – i.e. co-opting Wynnefield candidate David Clarke while concurrently adopting a raft of obstructive governance provisions – walks a rather fine line by implying the board is open to settlement arrangements and a shareholder-backed nominee, in each case despite concurrent efforts to actively obstruct a solicitation by the firm’s second largest investor.
Rizal Commercial Banking Corp
Philippine Stock Exchange – June 27
In wake of an international money laundering scandal shrouded in mystery, shareholders will vote on the appointment of Rizal Commercial Banking Corporation’s new president and CEO, Gil Buenaventura. The bank’s former leader, Lucio Tan, resigned in order to take “moral responsibility” for its branch’s involvement in one of the most successful bank heists in history. In February 2016, cyber attackers attempted to steal US$951 million from the Bangladesh Bank’s reserves in New York. Media headlines poked fun at the hacker’s typo of “foundation” as “fandation,” which effectively tripped up an allocation of US$850 million into a fake NGO in Sri Lanka. US$101 million, however, was stolen and US$81 million was diverted to the Philippines and deposited into fictitious accounts at the Company’s Jupiter branch in Makati.
An investigative probe conducted by the Philippine senate resulted in finger-pointing between the bank’s branch workers and top executives. What we know so far is that most of the deposited funds were withdrawn and taken to several casinos. Allegedly, the funds were converted into chips, reverted back into cash and remitted to overseas accounts. While the severity of this scandal has undoubtedly harmed the bank’s public image, the Company has taken pragmatic steps in moving forward, such as clearing Mr. Tan’s name through an internal investigation and the appointment of seasoned key management officials. Due to the ongoing investigative nature of this scandal, shareholders will have to stay tuned to see how the new leadership will navigate through the potential impacts arising from the heist.
Asahi Kasei Corporation
Tokyo Stock Exchange – June 28
Typically in Japan, purchasing a home rather than renting is not only a large purchase but also a significant life decision. Imagine the horror when, after purchasing units in a Yokohama condominium, residents found that their building was tilting due to shoddy piling work conducted by Asahi Kasei Construction Materials Corp. (“AKCM”), a subsidiary of Asahi Kasei Corporation (“the Company”). The Company’s internal investigation found that piling data had been falsified in at least 10% of the projects worked on by AKCM. While the Company is more well-known for its chemical products, the revelation of data falsification has surely cast a shadow over the brand name. Furthermore, the Company has recorded an extraordinary loss of ¥1,456 million for expenses related to its investigations and possible losses related to compensation for affected parties. We note that both top executives at AKCM and the Company have stepped down from their respective positions as of April 1 to take responsibility for the scandal.