Business / Corporate

Lixil announces board candidates, rejects ex-CEO's proposal

JIJI

Major housing equipment maker Lixil Group Corp. has announced eight candidates for its board of directors to be submitted to a general meeting of its shareholders in June.

Former Lixil President and Chief Executive Officer Kinya Seto, a current board director and Lixil shareholder, who is at odds with Chairman and CEO Yoichiro Ushioda, has asked the company to include eight people, including himself, in its list of director nominees.

But the list does not include Seto. On Monday, Seto, who aims to return as CEO after being removed from that post and as president last autumn, expressed anger and said that he still intends to realize his shareholder proposal.

None of the eight people on the Lixil list have ever been appointed to the board. Seven are from outside of the company.

Only two of the eight people proposed by Seto, including former Supreme Court Justice Kaoru Onimaru, are on the company’s list.

The management feud between Ushioda, who is from Lixil’s founding family, and Seto appears likely to escalate further.

Talking to reporters in Tokyo on Monday, Seto said he will continue to call for all eight people he proposed to be appointed to the Lixil board.

The current board consists of 12 directors. Ushioda has expressed his intention to resign as board director May 20. In addition, President and Chief Operating Officer Hirokazu Yamanashi and the head of the nomination committee that decided the company’s eight director candidates will also step down from the board.

Foreign institutional investors have criticized Seto’s ouster as president and CEO, and demanded that Lixil dismiss Ushioda, saying the procedures related to the dismissal showed that the firm’s governance system is not functioning.

Ushioda has voiced his intention to quit as chairman and CEO in June.

Also on Monday, Lixil said it incurred a group net loss of ¥52.1 billion in the year to March due to poor performance at an Italian subsidiary.

This year, Lixil expects to return to the black with a net profit of ¥15 billion as it plans to eke out a profit by selling a domestic building materials unit.

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