Improve Ain’s
Corporate Governance
Pharmacy chain Ain’s corporate governance crisis
Key Issues:
Scandal and Convictions: Two members of Ain’s management were arrested last year and found guilty by a court of first instance in the KKR Sapporo Medical Centre case in April of this year. It was revealed that Ain management had illegally replaced its proposal documents in order to win a public bid.
Lack of Transparency: Ain’s response to the scandal has been opaque and evasive, failing to provide clear explanations or take responsibility.
Lack of Independence: All of Ain’s current “independent outside” directors are closely tied to Ain or Ain President Mr. Otani, thus lacking true independence and accountability.
Complacent Leadership with No Real Oversight: Ain President Mr. Otani’s complacent, unchecked management with no independent supervision has led to declining financial performance with Ain’s TSR underperforming the TOPIX by -127.5% over five years and ROE falling around 8%, which is the minimum required under the Ito Report.
Why action is urgent
Routine Misconduct: As a result of the KKR Sapporo Medical Center scandal, members of Ain management have been arrested and found guilty by a court of first instance. The discovery that illegal bid document replacement and unethical practices were accepted at Ain has revealed its deeply flawed corporate culture.
Lack of Independence: Mr. Otani hand-picked “independent directors” and “independent corporate auditors” to serve his interests through means such as accepting “outside directors/corporate auditors” from shareholders which only became shareholders through third-party allotments. As a result, there are no truly independent directors and auditors overseeing the management of Ain.
Poor Management: Under Mr. Otani’s complacent management, Ain’s performance has consistently deteriorated, harming all stakeholders.
Our proposed solutions
The current state of Ain is unacceptable. The time for action is now. Oasis asks shareholders to vote as below to fix the current situation and to improve Ain’s corporate governance:
1. Vote AGAINST Company proposal: Appointment of Mr. Shigeki Kimura
Ain has taken a shocking step by nominating incumbent director Mr. Ito’s subordinate, Mr. Kimura, as a director candidate, while not renominating Mr. Ito himself, who faces calls for dismissal. This allows Mr. Ito to escape accountability to shareholders while maintaining influence over Ain through Mr. Kimura. We urge shareholders to vote against him as he is NOT truly independent, and his appointment is NOT in the common interest of all shareholders.
2. Vote FOR Oasis proposal: Dismissal of Outside Directors Lacking True Independence
Dismiss “outside” directors Mr. Shigeru Yamazoe and Mr. Junro Ito.
3. Vote FOR Oasis proposal: Appointment of Truly Independent Directors
Appoint four new independent directors who are highly qualified, truly independent, and diverse.
4. Vote FOR Oasis proposal: Change the Compensation Plan
Introduce a new compensation plan that increases transparency regarding outside directors’ compensation and aligns their incentives with shareholders.
Your Support Matters
Shareholders must unite to add true independence to Ain’s board and enhance its corporate value. Oasis urges shareholders to:
Vote AGAINST Ain’s proposal to appoint Mr. Kimura
Vote FOR Oasis’s proposals for better governance
Join us in pointing Ain in the right direction and protecting corporate value and shareholder value
Please click HERE to view the Oasis investor presentation on Ain.
Please click HERE to view the Open Letter and Questionnaire to Ain’s “Investigation Team”, Management, and Board of Corporate Auditors
We invite all of Ain’s shareholders to contact us and join us in improving Ain’s corporate governance. Please reach us by email at AinCorpGov@oasiscm.com.