Oasis Management Proposes Governance Change for Kobayashi Pharma

Oasis Management Advocates for Enhanced Governance at Kobayashi Pharma

Oasis Management Company Ltd. (“Oasis”) has emerged as a significant voice among shareholders of Kobayashi Pharmaceutical Co., Ltd. (4967 JT). Holding over 7.5% of the company, Oasis is actively pushing for essential changes in leadership and independent oversight to address pressing governance issues.

A Call for Accountability Following Health Hazards

The recent scandal involving the Beni-Koji Choleste-Help products has highlighted serious lapses in health and safety compliance within Kobayashi Pharma. As part of its commitment as a responsible shareholder, Oasis has been in dialogue with the company since 2023, focusing on enhancing corporate governance and ensuring the safety of consumers who rely on its products.

Engagement with Shareholders

Following the scandal, Oasis has intensified its outreach to fellow shareholders, urging them to support a series of proposals intended to overhaul the current board. These proposals are vital to securing a transparent and thorough investigation into the events surrounding the scandal and to ensuring measures are taken to protect consumer safety.

Proposals for Change

Among the proposals Oasis is advocating for is the election of three new independent directors, all with extensive backgrounds in governance and compliance:

New Director Candidates

1. Mr. Richard Dols Young, a seasoned attorney specializing in product liability.
2. Dr. Tomoko Chubachi, a former Chief Medical Officer with vast experience in regulatory compliance.
3. Mr. Yoshio Nakamura, noted for his investigative acumen and legal expertise.

Additionally, Oasis proposes the appointment of Mr. Shin Ushijima to lead an independent inquiry into the Beni-Koji scandal. Ushijima brings significant expertise in corporate governance, which is essential for restoring trust and accountability.

Addressing the Beni-Koji Scandal: A Timeline of Events

The timeline surrounding the scandal uncovers a multitude of failures. A physician notified Kobayashi Pharma in early January 2024 regarding potential health risks associated with the Beni-Koji products. However, it was only in late March 2024 that the company chose to execute a voluntary recall of the products. This delay exacerbated the consequences, contributing to serious health risks for consumers.

Consequences of Delayed Action

By December 2024, official data revealed that the health impact involved alarming statistics: 397 fatalities and over 2,635 patients requiring medical treatment due to the product's consumption. The lack of decisive action from the company's leadership ignited outrage from shareholders and consumers alike.

The Need for Transparent Investigations

In the wake of the scandal, Kobayashi Pharma established a “Fact-Finding Committee” that has drawn criticism for its lack of independence and thoroughness. This committee failed to execute a comprehensive investigation into various issues related to the scandal, and it did not sufficiently address the concerns regarding the quality control measures that should have been in place.

Critique of the Committee's Integrity

Oasis believes that the committee's close relationship with company management undermined its findings and that it did not adhere to the established guidelines for third-party investigations. Investors are demanding a more impartial review of the incidents to ensure accountability at all levels.

Oasis's Vision for the Future of Kobayashi Pharma

With the proposals on the table, Oasis is lobbying to reshape the governance framework at Kobayashi Pharma. They are adamant about the necessity for a governance structure free from the undue influence of founding family members, which has historically hampered transparency.

The Role of Governance in Consumer Safety

Seth Fischer, the Chief Investment Officer of Oasis, emphasizes the dire need for effective governance to prevent future incidents. He urges shareholders to support the proposals aimed at welcoming independent voices into the boardroom and rebuilding a culture of accountability within Kobayashi Pharma.

Conclusion: A Call to Action for Shareholders

The upcoming extraordinary general meeting is a pivotal moment for shareholders. Oasis makes a passionate plea for their fellow investors to champion these proposals, which stand to benefit not just the company's governance but also safeguard consumer well-being.

Frequently Asked Questions

What is the main concern regarding Kobayashi Pharma?

The main concern is the serious lapses in health and safety compliance, particularly related to the Beni-Koji scandal.

Why is Oasis calling for new directors?

Oasis believes new directors with strong compliance backgrounds are essential for improving corporate governance and accountability.

What are the expected outcomes of the EGM?

The expected outcomes include electing new directors and appointing an independent investigator to scrutinize the Beni-Koji incident.

How has the Beni-Koji scandal affected consumers?

It has led to numerous health issues, including fatalities and hospitalizations, raising serious concerns about product safety.

What does Oasis hope to achieve through these proposals?

Oasis aims to restore shareholder confidence, enhance governance, and improve safety protocols at Kobayashi Pharma.

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