Shareholders Reject Japan Electric Furnaces Consolidation

Electric furnace steel maker, Tokyo Kohtetsu announced on Thursday the shreholders rejected proposed consolidation with Osaka Steel at the extraordinary shareholders meeting at Oyama plant in Tochigi. The rejection of consolidation propose with agreement between management of both parties is the first case in Japan. Shareholders revoked the proposals with rejection by around 42% shareholders of voting right and Tokyo Kohtetsu doesn’t have intention for the consolidation. Tokyo Kohtetsu agreed with Osaka Steel in October that Osaka Steel purchases Tokyo Kohtetsu through share exchange in March. However, Ichigo Asset Management, which holds 12.64% share in Tokyo Kohtetsu, appealed against the agreement citing unfair stock exchange rate for shareholders of Tokyo Kohtetsu. The fund tried to gather supporting shareholders to reject the proposal. Shunsuke Hirashima, president of Tokyo Kohtetsu said at press conference after the meeting the firm tries to operate stand alone company though he is sorry to lose the opportunity to strengthen the competitiveness. Scott Callon, CEO of Ichigo Asset Management said at press conference Tokyo Kohtetsu failed to accept the recommendation to review the exchange rate. He said the firm keeps holding the share and could increase the share for Tokyo Kohtetsu.