(English translation)
Press Release
Global ESG Strategy
7 November 2024
Swiss-Asia Financial Services Pte Ltd（以下「SAFS」）の運営ファンドであるGlobal ESG Strategy（以下「GES」）は、ESG（Environment（環境）, Social（社会）及びGovernance（ガバナンス））の視点から中長期的な投資を行う投資ファンドであり、責任ある投資家として、建設的な対話等を通じ、日本の上場会社の中長期的な企業価値・株主価値の向上を実現することを後押ししていくことを運用方針としています。
GESは2023年より東証スタンダード上場の日本ビジネスシステムズ株式会社（以下「JBS」）（証券コード：5036）に対する投資を開始し、同社へのエンゲージメントを継続してまいりました。現在、GESはJBSの株式を議決権にして2%強保有しており、この度2024年12月開催予定のJBSの定時株主総会に向けて株主提案（以下「本提案」）を提出しました。
（以下英訳）
Swiss-Asia Financial Services Pte Ltd (SAFS) manages the Global ESG Strategy fund (GES), an investment fund that carries out long-term investment activity from an ESG (Environment, Social and Governance) perspective. The policy of the fund is to fulfill its role as a responsible investor by engaging in constructive dialogue and pushing listed companies in Japan towards achieving a long-term improvement in corporate and shareholder value.
GES started investing in Japan Business Systems, Inc. (“JBS” or the “Company”, securities code: 5036), which is listed on the TSE Standard Market, in 2023, and has been engaging with management. At present, GES holds more than 2% of the voting rights for JBS and GES has submitted the following six shareholder proposals (the “Proposals”) to the annual general shareholders’ meeting to be held in December 2024.
Shareholder Proposal (English translation):
d135781-37-e6a4b6b6e34bb9bf8d56847297b8f4f5.pdfPresentation (English translation):
d135781-37-4ca32eb5927d93a24fa23cb7d93e8f92.pdf
Proposal 1: Appropriation of Surplus
Proposal 2: Partial Amendment of Articles of Incorporation (Policy on Dividend from Surplus)
Proposal 3: Partial Amendment of Articles of Incorporation (Policy on Real Estate Acquisitions)
Proposal 4: Partial Amendment of Articles of Incorporation (Action to Implement Management that is Conscious of Cost of Capital and Stock Price)
Proposal 5: Partial Amendment of Articles of Incorporation (Formulation and Disclosure of Plan to Change Listing Segment)
Proposal 6: Partial Amendment of Articles of Incorporation (Board of Directors’ Consent to Individual Meetings with Shareholders)
The Japanese capital markets are plagued by the IPO Trap, a situation in which newly listed companies fail to generate growth owing to an inability to make effective use of the funds obtained through listing, thereby causing share prices to languish, while founding families treat IPOs simply as the end-point of their personal wealth creation strategies.
JBS published a medium-term business plan shortly after listing in August 2022, through which it communicated its post-listing business strategy to shareholders and investors. However, in only two years from the IPO, JBS had announced cuts to guidance and shortfalls or withdrawals of its medium-term plans. Indeed, the Company has failed to meet its medium-term plan profit targets for even one fiscal year. Additionally, a very short time after the acquisition of Nextscape immediately following the IPO and simultaneous with the medium-term plan announcement, JBS impaired the entire value of the goodwill arising from the acquisition. This and a series of other errors in judgement have quickly forced JBS into a critical juncture, the outcome of which will determine whether it can return to a path of growth.
In this context, the JBS Board of Directors is failing to exercise its duty of governance effectively and, as at the time of writing, six months have passed without JBS having unveiled a new medium-term plan, which will underpin the new business strategy. Moreover, the investment in corporate housing started before the IPO has even gained momentum in a way that runs contrary to guidelines set by the Tokyo Stock Exchange, despite the negative impact on capital efficiency. Management has failed to provide a rational explanation for the investment, notwithstanding that JBS now owns a total of 10 corporate residences at an estimated book value of around 16.4 billion yen.
JBS is stuck firmly in the IPO Trap, with a share price that has been languishing since the listing as shareholders and investors abandon the stock owing to the string of strategic errors and management’s consistent lack of interest in giving ear to the concerns of the capital markets. In order that JBS gets out from this trap and return to a path of growth congruous with its listed status, GES has submitted the above shareholder proposals to the annual general meeting of JBS shareholders scheduled for December 2024. For details of the proposals, please refer to the appended proposal document and additional explanatory material.
GES hopes that by submitting these shareholder proposals and publicizing them to JBS shareholders, it will help to resolve the critical governance failings, promote management that genuinely pursues capital efficiency, and maximizes the common interests of all shareholders.
Contact: globalesg@swissasia-group.com
About Global ESG Strategy
Global ESG Strategy ("GES"), an investment fund that is managed by SAFS, makes medium- to long-term investments from an ESG (Environment, Social and Governance) perspective, and its policy is to promote improvements on enterprise value and shareholder value of investee companies through constructive dialogue with investee companies and other means.
About Swiss-Asia Financial Services Pte Ltd
SAFS is founded in 2004, and is a Singapore based investment management company that holds a Capital Markets Services (CMS) License under the Singapore Securities and Futures Act (SFA).
Disclaimer
This document is for the purpose of providing information on shareholder proposals by GES which is managed by SAFS to JBS and should not be used for any other purpose.
The information contained in this document is based on SAFS’s independent research and analysis and publicly-available information. We, SAFS, GES and other SAFS’s affiliates (“SAFS et al.”), do not guarantee its accuracy, appropriateness or completeness.
This document represents the unique views, expectations and opinions of SAFS et al. and is subject to change. You may not rely on this material for any purpose whatsoever, nor should it be interpreted as investment, financial, legal, tax or other advice.
The information and opinions included herein may include forward-looking statements. You should be aware that all forward-looking statements, estimates, and projections are inherently uncertain and subject to significant contingencies and have been included solely for illustrative purposes. Actual results may differ materially from the estimates, projections or assumptions contained herein due to reasons that may or may not be foreseeable. SAFS et al. accept no liability or responsibility whatsoever for any direct or consequential loss and/or damages arising out of or in relation to any use of opinions, forecast, materials and data contained herein or otherwise arising in connection therewith.
None of the information or content in this document is, in any way, an offer, a recommendation, a promotion of services or products; and shall not be construed as an advertisement, solicitation or representation or as advice or a recommendation regarding the purchase or sale of any investment product or any investment in any securities.
This document does not, and should not be construed as, a request for SAFS et al. to grant SAFS et al. or any other third party the authority to exercise voting rights on behalf of the shareholders of JBS with respect to the agenda at the Annual General Meeting of Shareholders. In addition, it does not propose, encourage, solicit or aim to grant the shareholders of JBS the right to exercise their voting rights on their behalf by designating SAFS et al. or any other third party as their proxy.
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