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Hoya seeks board transparency, diversity

Yutaka Yamanaka, a grandson of co-founder of Hoya Corp. Shigeru Yamanaka, said the company needs a more diverse, transparent board to help prevent “failures“ such as the USD 1 billion purchase of Pe…

Yutaka Yamanaka, a grandson of co-founder of Hoya Corp. Shigeru Yamanaka, said the company needs a more diverse, transparent board to help prevent “failures“ such as the USD 1 billion purchase of Pentax Corp. On 11 May 2010, Yamanaka submitted a 15-point shareholder proposal which includes the request of disclosure of individual directors“ pay and limits on concurrent board membership. Hoya“s 2007 acquisition of camera and endoscope maker Pentax to expand its medical care business was “overpriced“, he said. The proposal is aimed at establishing at Hoya a system capable of advancing new businesses such as ophthalmology medicines and research and development, Yamanaka said in a recent interview. According to the company“s spokesman Naoji Ito, Hoya has received multiple agenda items and plans to include them in the notice to its shareholders. Yamanaka“s proposals also seek an end to cumulative voting, which allows shareholders to withhold votes from some nominees in order to cast multiple votes for others. These changes to the charter would require a two-thirds vote at Hoya“s annual shareholder meeting to be held on 18 June. Fifty-one per cent of Hoya“s outstanding shares are owned by overseas shareholders such as JPMorgan Chase & Co., Capital Research & Management Co. and Deutsche Bank AG, while Yamanaka said he owns less than 1 per cent. According to data from Bloomberg, five of Hoya“s eight directors are independent of the company, the highest ratio among Japan-based industrial goods and services companies. My goal is not to cause a confrontation at the shareholder meeting, but rather to find way to increase the company“s value, Yamanaka said. Net income increased 51% to JPY 37.9 billion (USD 421 million) in the 12-month period ended 31 March 2010, while sales dropped 9% to JPY 413.5 billion. According to the company, operating profit, or revenue less the cost of goods sold and administrative expenses, increased 8.9% to JPY 64.3 billion, after Pentax operations turned profitable.

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