Strategic Capital Co., Ltd.
Strategic Capital Co., Ltd. has published an opposing opinion to our opinion issued by DyDo Limited Co., Ltd. on June 7th.
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DyDo Limited Co., Ltd. has published a rebuttal to our company in a letter dated June 7th.
The current management team and the new representative director candidate of DyDo Limited Co., Ltd. not only give ad hoc responses and responses to our proposals and points out, but also make
counterarguments that go beyond their previous statements. Our opinion regarding DyDo Limited’s recent rebuttal is as follows.
[Image: https://prtimes.jp/i/52343/81/resize/d52343-81-bc6dd037a3bc4416f116-0.jpg&s3=52343-81-f6dad02a93df3b2617002ea62a2ae033-170×170.jpg] DyDo Limited (hereinafter referred to as “DyDo”) has stated in a document dated June 7th, “Our View on Materials Published by Strategic Capital Co., Ltd.”, that our company (hereinafter referred to as “SC”) We have published a rebuttal to the “About Director Candidates Proposed by DyDo Limited Co., Ltd. (TSE Standard: Code 3205)” announced on May 27th and the “About Shareholder Proposals to DyDo Limited Co., Ltd.” announced on the 29th of the same month. I am. The SC’s opinion on DyDo’s recent objections is as follows. DyDo’s current management team and the new representative director candidates not only respond to the SC’s proposals and points out in an ad hoc manner, but also go so far as to contradict their previous statements. Furthermore, since SC is not planning an acquisition, DyDo’s criticism of citing the “Guidelines for Conduct in Corporate Acquisitions” published by the Ministry of Economy, Trade and Industry in August last year is off the mark. Regarding [Reason for Opposition 1.], the SC believes that Mr. Yamada and Mr. Naruse of Gemini Strategy Group (hereinafter referred to as “Gemini”), which DyDo is proposing as representative director candidates, hold numerous concurrent positions, and that both Mr. Dido refutes this, pointing out the problem of continuing to hold concurrent positions. The SC once again points out that the fact that a representative director of a listed company concurrently serves as representative director, etc. of many companies with which they have no capital relationship shows a lack of insight and professional ethics on the part of the listed company’s management. First, CEO candidate Mr. Yamada still intends to continue holding concurrent positions as representative director and director of numerous other companies, and if the excuse that “there is no risk of hindering the execution of duties due to concurrent positions” is valid, then I’m sure many listed company managers do the same. However, the SC is ignorant of such cases. Mr. Naruse, the COO candidate, should have been planning to continue holding concurrent positions as the representative director of one other company and the directors of two companies are listed as “currently in office” in the notice of convocation of the general meeting of shareholders, but including the SC. In response to criticism from a third party, it seems that the company changed its response to stop holding other concurrent positions. Regarding [Reason for Opposition 2.], the SC pointed out that Gemini’s receipt of consulting fees in addition to director compensation for Mr. Yamada and Mr. Naruse would create a serious conflict of interest between Gemini and DyDo shareholders. DyDo counters that there is no such concern as long as the process is conducted fairly. This is also similar to 1. above, in the first place, the fact that a listed company manager concurrently serves as a representative or executive employee of another company, and then the listed company pays a fee to that other company, is due to his insight and professional ethics as a listed company manager. SC is unaware of any similar cases at other listed companies. Regarding [Reason for Opposition 3.], the SC criticized the fact that DyDo’s current management team would remain as advisors after retiring as directors, but DyDo stated, “Mr. Nabewari and Mr. Watanabe will not be appointed as advisors of the Company after retiring as directors of the Company. Therefore, SC’s claims are completely contrary to the facts.” However, the current President and CEO, Mr. Nabewari, clearly expressed his intention in a meeting with the SC on May 21 that Mr. Nabewari and Mr. Watanabe will remain as advisors. Therefore, it is not that the SC’s claims are “contrary to the facts,” but rather that “I was planning to become an advisor, but I gave up on becoming an advisor after receiving criticism from third parties, including the SC.” That’s the correct understanding. Regarding [Reason 4.], the SC pointed out concerns about Gemini’s selection process and track record. First, regarding the selection process, DyDo stated at DyDo’s financial results briefing on May 24th, “(Regarding the business improvement of the retail business about a year ago), Gemini was introduced to us, so it was not a competition with other companies.” I am. For other points, please refer to our special website “About the shareholder proposal to DaiDo Limited (Reason 4 for opposing DaiDo’s proposal)” (https://stracap.jp/3205-DAIDOH/#menu02_4). Please refer to it. Regarding [Reason 5.] Regarding the breakdown of operating income of 1.5 billion yen, DyDo announced a partial amendment to the medium-term management plan on June 7th, in response to the SC’s comments. This means that DyDo miscalculated the figures for important management targets, but not only that, the SC repeatedly asked the reason for the drastic reduction in SG&A expenses at the meeting on May 21st and at the financial results briefing on the 24th. However, he said, “I can’t give you an immediate answer.” Even if it is now claimed that the figures are based on evidence, it can only be viewed as an afterthought. For other points, please refer to “About the shareholder proposal to DaiDo Limited (Reason 5 for opposing DaiDo’s proposal)” (https://stracap.jp/3205-DAIDOH/#menu02_5). [Others] Regarding the stock option system, the real estate rental business, the failure of M&A, etc., DyDo’s management team, which caused the management to deteriorate to such an extent, is refuting past inappropriate management as if it were legitimate, and now SC cannot participate in such discussions.
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