Nippon Paint Holdings Co. said Thursday it has decided to give top shareholder Wuthelam Group, of Singapore, a majority on its board, effectively handing over control of Japan's largest coatings maker.
Wuthelam, which owns 38.9 percent of Nippon Paint, demanded the move in January after the Japanese company attempted a costly acquisition of a U.S. competitor.
Five executives chosen by Wuthelam will be newly appointed to the Nippon Paint board, and Wuthelam executive Goh Hup Jin — until now the company's sole representative on the board — will be promoted to chairman. Nippon Paint President Tetsushi Tado will remain in the role.
The management reshuffle, which must be approved by shareholders at a general meeting later this month, will expand the current seven-member board to 10 members.
Goh denied that the move amounted to a takeover, saying at a news conference in Osaka, "We thought it best that the board's governance be brought up to global standards."
"I hope to instill in the new board a sense of responsibility to maximize shareholder value," he said.
Wuthelam had voiced concerns over the board's decision-making after it announced plans to acquire Axalta Coating Systems Ltd. for ¥1 trillion (at the time around $8.9 billion). The talks fell apart when the parties failed to agree on a final price.
Tado said at the same news conference that going forward the board would look for "low risk, high return opportunities" for acquisitions.