Activist Campaign
Tokyo Broadcasting System

Corporate Governance Failures

A damaging consequence of TBS’ cross-shareholding relationships is that they shield TBS management from independent review and oversight. Three of the four “independent/outside” directors of TBS are executives of Mainichi Newspapers, Dentsu and MBS Media Holdings – all of which have cross-shareholding and/or transactional relationships with TBS. These three directors failed to attend numerous board meetings in 2017, reflecting their priorities elsewhere. TBS management effectively operates free of accountability to a truly independent board.

The TBS board also suffers from a low level of director share ownership, with a collective interest of just 0.1%, resulting in a lack of alignment of interest with shareholders. With both the absence of a truly independent board and low director share ownership, TBS is not achieving its full potential. This appears to be a view shared by a large portion of TBS shareholders, with the approval rating of TBS’ President and two outside Directors falling below 80% in 2017.

TBS management have not adequately explained their capital policy, nor articulated their plans for capital efficiency, failing to meet its obligations under Principles 1.3 and 5.2 of the Corporate Governance Code. In particular, TBS management has failed to explain how its strategic shareholdings positively contribute to TBS’ capital efficiency, return on equity and other relevant performance criteria.

As of 31st March 2018, TBS’ return on equity (ROE) was 3%, far below the minimum target level of 8% recommended in Professor Ito’s Review of Competitiveness and below the 5% recommended by ISS for director re-election. We note that TBS’ “group mid-term management plan 2020”, does not contain any information on how TBS plans to improve its current ROE, much less achieve the suggested minimum of 8%.

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This website, and the information contained herein, (collectively referred to as “the Website”) is being provided for the shareholders of Tokyo Broadcasting Holdings. Inc. (“TBS”) for information purposes only.  Asset Value Investors Limited (“AVI”) is the investment manager of one of the shareholders of TBS, namely British Empire Trust plc (“BTEM”).

AVI is authorised and regulated by the UK Financial Conduct Authority (“FCA”) and is also registered as an Investment Advisor with the United States Securities and Exchange Commission (the “SEC”) under the United States Investment Advisors Act of 1940.

The Website is directed only at Professional Clients or Eligible Counterparties as defined by the UK FCA.

AVI sent a written proposal addressed to TBS (the “Proposal”) through which AVI seeks to ask shareholders to vote on a distribution of in-kind shares or cash. The Proposal is accessible through the Website.  AVI created the Website to help enable visitors to reach their own conclusion regarding whether or not to support the Proposal.

The Website was created solely for the purpose mentioned above and is provided for information purposes only.  AVI is by no means soliciting or requesting other shareholders of TBS to jointly exercise their shareholders’ rights with AVI (including, but not limited to, voting rights).

AVI declares that it does not intend to be treated or deemed a “joint holder” (kyo-do hoyu-sha) with other TBS shareholders under the Japanese Financial Instruments and Exchange Act by virtue of disseminating information through the Website or engaging in dialogue with other TBS shareholders in or through this Website.

The Website exclusively represents the opinions, interpretations and estimates of AVI in relation to TBS’s business and governance structure.  AVI is expressing such opinions, interpretations and estimates solely in its capacity as an investment manager to BTEM.

The information contained herein is derived from proprietary and non-proprietary sources deemed by AVI to be reliable.  While AVI believes that reasonable efforts have been made to ensure the accuracy of the information contained in the Website, AVI makes no representation or warranty, expressed or implied, as to the accuracy, completeness or reliability of such information.








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本ウェブサイトに掲載される情報は、AVIが信頼できると判断した専有又は非専有の情報源から得たものです。AVIは本ウェブサイトに掲載する情報の正確性を確保するために合理的な注意を払っておりますが、その正確性、完全性および 信頼性について明示・黙示にかかわらず一切の表明・保証をするものではありません。