OSAKA — Shareholders of restructuring general contractors Hazama Corp. and Kumagai Gumi Co. said Wednesday that they will seek damages of 120 million yen from executives of the two firms for making hefty political donations when the companies were not paying dividends.
The shareholders plan to send a letter that requests the companies’ auditors to file a lawsuit and threatens independent action if the auditors do not comply within 30 days, they said.
The shareholders are members of Osaka-based Kabunushi (Shareholder) Ombudsman. The civic group has experience filing a number of high-profile lawsuits against major Japanese companies, including Sogo Co. and Nomura Securities Co., alleging corporate negligence in observing the rights of individual shareholders.
According to the group, Hazama and Kumagai Gumi have been unable to pay dividends to shareholders since fiscal 1997, which began April 1, 1997.
Yet, in the four years through this year, Hazama has offered a total of around 49 million yen to major political parties such as the Liberal Democratic Party and the Democratic Party of Japan, while Kumagai Gumi made contributions totaling 69 million yen over the past three years, the group said.
An official of the ombudsman group also said the two companies “could have violated the Political Fund Control Law, which bans a company in capital deficit from making political donations for three consecutive years or longer.”
A spokesman for Hazama said the company would not comment on the request as it has not yet received it.
In May this year, Hazama asked its major creditor banks to give up claims on loans worth a combined 105 billion yen and obtained their approval for forgiveness in September.
Kumagai Gumi is currently requesting the forgiveness of around 450 billion yen in debts from creditor financial institutions.
Major Japanese contractors have been under severe financial difficulty due to massive property investments they made during the bubble economy in the 1980s that later turned sour.
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