TOKYO, April 18 (Reuters) - Japanese toilet maker Lixil Group’s CEO is to resign next month, marking a rare victory for activist minority shareholders who had demanded that he step down.
Yoichiro Ushioda’s plan to resign, announced on Thursday, could be a signal that vocal minority shareholders are becoming more successful in changing the management of Japanese companies following Prime Minister Shinzo Abe’s efforts to strengthen corporate governance.
Ushioda’s move follows a boardroom drama that has been unusually fractious, at least by the standards of corporate Japan.
Ushioda, who hails from one of the company’s founding families, said he was resigning as chief executive and chairman of the board.
This followed Lixil’s statement that it would fall to a full-year net loss of 53 billion yen ($4734 million) in the year that ended in March, from its previous forecast of a slight profit.
Four investment firms last month had called for Ushioda to leave the company’s board along with the company’s chief operating officer, Hirokazu Yamanashi. The investors said their appointment last year after the previous CEO Kinya Seto’s abrupt resignation raised concerns about due diligence and corporate governance.
The shareholders - Marathon Asset Management, Indus Capital Partners, Polar Capital Holdings Plc and Taiyo Pacific Partners LP - had called for an extraordinary shareholders’ meeting to vote out Ushioda and Yamanashi from the board, saying the two should also consider resigning from their management positions.
Lixil has said the meeting would be held in the latter half of May, adding on Thursday that Ushioda and Yamanashi had requested that to be halted.
Lixil was created in 2011 through a merger of five building materials and housing companies, including Tostem and Inax.
As of September, 38 percent of Lixil’s shareholders were foreign institutions while 7.2 percent of the company was held by Japanese institutions, it said last month. ($1 = 111.9100 yen) (Reporting by Junko Fujita; Editing by David Dolan and Jane Merriman)