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Yoshiaki Murakami is either a shareholder crusader or an unscrupulous asset stripper--depending on your point of view. The founder of investment management company M&A Consulting Inc., which targets cash-rich but underperforming companies, Murakami has become a cause celebre in the Japanese press for his proxy campaign to promote better management at Tokyo Style Co., a women's apparel maker. A former bureaucrat-turned-gadfly, Murakami's face is all over Japan's business glossies. He's even the subject of a television documentary.
In a country where shareholder rights have long been ignored, Murakami, 41, is a financial insurgent. His goal is to shake up complacent management throughout Japan Inc. With $470 million in assets under management at M&A, he has the financial firepower to buy big enough stakes in companies to launch proxy challenges--especially if he can persuade other investors to join.
Even though he was a senior official at the hidebound Ministry of International Trade & Industry prior to launching M&A in 1999, Murakami has long advocated better corporate governance. He's also out to make money, delivering 15% annual gains for his backers, which include leasing giant Orix Financial Services Inc. Nor does he fancy himself a turnaround artist. He just thinks there are lots of opportunities for better returns from midsize, cash-rich companies. "A cash-mountain type of company is a lot easier to change" than a sick one, he says.
His battle against Tokyo Style is a case in point. After taking an 11.7% stake, Murakami began asking some embarrassing questions in public. Why was a company with $480 million in sales and an $890 million market capitalization hoarding some $1 billion in cash and securities with no clear strategy to invest it? Murakami called for a fat dividend for shareholders and the appointment of outsiders to Tokyo Style's all-insider board in order to help shape strategy.
Though his proxy proposal won backing from foreign shareholders, Murakami lost the fight at the May 23 annual meeting. But Tokyo Style did raise its dividend modestly and has appointed outside directors. Murakami vows to go after other companies. Japan's corporate directors had better take note.