TOKYO – Cerberus Capital Management LP publicly questioned the management of Seibu Holdings on Friday, hoping to garner support for its plans to shake up the board of the Japanese railway and property group at a shareholders meeting scheduled for later this month.
The disclosure of questions critiquing Seibu's management is the latest salvo in a months-long war of words over the terms of Seibu's planned relisting on the Tokyo Stock Exchange.
The U.S. private equity fund raised its stake in Seibu by 3 percentage points to 35.48 percent earlier this month in an unsolicited public tender, although that fell short of its target of a 44.7 percent stake.
In a 22-page letter and list of questions addressed to Seibu's president, Takashi Goto, the fund criticized the company for failing to hit earnings targets and for its governance and disclosure practices.
Cerberus asked Goto to explain how the current board was being supervised and held accountable for its performance.
"Please explain in a specific way so that shareholders, who have lost opportunities to trade shares over eight years since delisting, can be convinced," Cerberus said in the letter.
The fund also demanded Seibu to make the shareholders' meeting, scheduled on June 25, open to the public via streaming video.
Seibu officials said they would answer the questions from Cerberus at the annual meeting.
Cerberus injected more than 100 billion yen ($1.06 billion) into Seibu in 2005, leading to a bailout of the railway and hotel operator after it was delisted in the wake of a scandal centered on the falsification of financial reports.
The relationship began to sour around 2011 over the terms of Seibu's planned public offering, expected to be worth several billion dollars.
(Reporting by Nathan Layne and Taiga Uranaka; Editing by Matt Driskill)