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OSAKA (Kyodo) The Murakami investment fund, holder of the largest equity stake in Hanshin Electric Railway Co., said Tuesday it wants the company to accept nine board members on its 16-member board recommended by the fund.

The nine include bureaucrat-turned-financier Yoshiaki Murakami, who heads the investment fund.

Hanshin issued a statement rejecting the proposal on the grounds management decisions should by made by a board with a “substantial” number of members versed in its railway and other operations, including the management of the Hanshin Tigers baseball team and real estate.

Nine members of the Hanshin board are up for re-election at a general shareholders’ meeting slated for June 29.

The development casts a shadow on plans by Hanshin Electric to integrate management with Hankyu Holdings Inc., which owns Hankyu Corp, another railway based in the Kansai region.

The integration plan is based on the assumption Hankyu will be able to purchase the Hanshin shares held by the Murakami fund. The Hankyu side is expected to continue negotiations over the share purchase up until the shareholders’ meeting.

The Murakami fund, which has a stake of about 45 percent in Hanshin, said in its proposal Tuesday that if the railway company wants to reduce the number of board members to eight at the shareholders’ meeting, they should include Murakami and four other people from among its candidates list.

Rejecting the proposal, Hanshin said that while its businesses should be managed “as a unit,” the Murakami fund has proposed separating the real estate business from the railroad operation.

Hanshin complained that the proposal represents a shift in the fund’s stance from “pure investment” to the pursuit of “management control.”

The proposal was dated last Friday, when Hanshin and Hankyu Holdings announced a basic agreement to integrate their management.

But if Hankyu Holdings and the Murakami fund iron out differences over the purchase price in time for Hanshin’s shareholders’ meeting, the investment fund may drop its proposal.

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