Kuroda Electric Co. says adding Japanese activist investor Yoshiaki Murakami to its board would damage the company's reputation.
Murakami, C&I Holdings Co. and related firms have taken a 16 percent stake in the electronic-parts trading company and are asking shareholders to appoint four new directors, including Murakami, to its six-member board at an extraordinary meeting on Aug. 21. Kazuya Murahashi, an executive officer at Kuroda Electric, says Murakami's conviction for a "serious securities crime" makes him unsuitable to represent the company with its Japanese customers. Murakami was found guilty of insider trading after being arrested in 2006.
Murakami, an outspoken early champion of investor rights in Japan, wants the Osaka-based company to pay all its profit to shareholders for three years. Kuroda Electric's resistance is an example of how companies find his approach abrasive in a culture that values harmony and has placed less importance on stock owners.