Insurer Nipponkoa reelects chief Hyodo despite shareholder challenge.
Nipponkoa Insurance Co. President Makoto Hyodo was reelected Thursday at a general shareholders meeting, despite opposition from the company's leading shareholder Southeastern Asset Management Inc., a U.S. investment advisory firm.
President Hyodo kept his job as he got support from other shareholders such as regional banks whose total stakes amount to about 45 percent, company sources said.
The U.S. investment fund, which owns an 18 percent stake in the Japanese insurer, opposed the reelection of Hyodo for the second straight year. It lodged an objection to his reelection last year, saying reform has been slow and financial conditions have deteriorated under the Hyodo's leadership.
The nonlife insurer faced another challenge from its former managers, who are shareholders and criticized the company's plan to merge with Sompo Japan Insurance Inc. in April next year.
The former managers argued that it would be inappropriate to go ahead with the merger when the global recession is worsening. They also questioned whether a merger with the money-losing Sompo Japan would be the right thing to do.
But Hyodo defended the merger plan, saying ''We have decided to merge on an equal footing, considering our present and future business outlook.''
The former managers also lashed out at Nipponkoa that it deliberately delayed the payouts of insurance benefits, an allegation denied by the insurer.
Sompo Japan incurred a group net loss of 66.71 billion yen in fiscal 2008 that ended March 31, a turnaround from a profit of 59.64 billion yen in the previous year, as a fall in revenue combined with heavy losses on financial guarantee insurance and securities holdings.
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|Publication:||Japan Weekly Monitor|
|Date:||Jun 29, 2009|
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