The collapsed Yamaichi Securities Co. failed at its final general shareholders’ meeting Friday to win approval to disband, due to insufficient shareholder attendance.
Yamaichi was unable to propose a motion to dissolve the brokerage because the combined holdings of the 928 shareholders present did not exceed 50 percent of outstanding shares with voting rights, as required by law.
The company, with the backing of several large-lot shareholders, is now expected to go to the courts to win a ruling to shut itself down. Securing court approval and preparing for court-supervised liquidation may take some time.
Yamaichi announced in November it would voluntarily shut down after revealing huge off-the-book debts. It closed down most operations by the end of March. Its liabilities had exceeded assets by 22.5 billion yen as of the end of March, despite repeated assurances by the firm and regulators that it had sufficient assets.
President Shohei Nozawa apologized Friday to shareholders about the situation, explaining how the board came to its decision in a few hectic days. He said the Finance Ministry had hinted to the nation’s fourth-largest brokerage that it should seek voluntary closure, and stressed that he did everything possible, including searching for a purchaser, to keep the firm alive.
To get permission to dissolve, management needed shareholders who together held more than half of the company’s 1.18 billion shares with voting rights — or at least 590.8 million — to attend the meeting. But the shareholders who showed up only held 459 million shares.
One major reason behind the low turnout was that a great portion of Yamaichi’s stock has been sold off by institutional investors since the announcement of the closure, leaving them in the hands of individual investors.
During the marathon meeting, many shareholders questioned management’s handling of the entire affair, including the failure of the board to summon an extraordinary shareholders’ meeting at the time. Nozawa often seemed at a loss for words.
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