Business / Corporate

Askul fight escalates as CEO says he will try to force top shareholder Yahoo Japan to sell its stake

Bloomberg

Askul Corp. plans to exercise its right to demand Yahoo Japan Corp. sell its 45 percent stake, escalating a public dispute between two major Japanese internet companies.

Askul Chief Executive Officer Shoichiro Iwata said he intends to convene a board meeting within a week to vote on the issue.

Whether the online retailer can force a sale hinges on the interpretation of an agreement struck when Yahoo Japan, which is backed by SoftBank Group Corp., first invested in Askul.

The company is in advanced talks with at least four potential bidders for the stake, Iwata added. They include a foreign private equity firm, a Japanese industrial company, a financial institution and a local fund, the CEO added.

The dispute — a rare instance of public bickering in corporate Japan — flared this month after Askul accused Yahoo Japan of violating the spirit of their agreement and its own independence by demanding the sale of internet mail-order business Lohaco. Yahoo Japan in turn wants to oust Iwata, saying it’s unhappy with the company’s deteriorating business. Yahoo Japan has said it has no intention of off-loading its 45 percent stake in Askul, worth about ¥67 billion ($617 million).

Should Yahoo Japan contest a stake sale decision, Askul’s management may consider bringing the matter to the courts, Iwata said. He plans to hold a town-hall meeting on Monday morning to ease employees’ concerns, explain the situation and outline ways to improve their business.

“I want to exercise the right” to force a sale, Iwata said in an interview. “New management could withdraw the court filing after I leave, so I will bring everything to light now and would like them to manage the company under public scrutiny.”

Askul’s shares rose as much as 3.4 percent in Tokyo, reversing an earlier decline. A Tokyo-based spokesman for Yahoo Japan declined to comment on how the company may respond to such a decision.

Yahoo Japan has voted against Iwata’s reappointment prior to Askul’s shareholders meeting on Aug. 2. But the latter company has argued its under-performance can’t be pinned on one individual because of one-off factors, including losses incurred in a major warehouse fire, as well as staff shortages plaguing the industry.

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