March 2, 2020
Independent Franchise Partners, LLP (“Franchise Partners”) today asks the management of Kirin Holdings Company, Limited (“Kirin” or “the Company”) (TSE: 2503) for clarification on its KV2027 “bridging” strategy at Kirin’s Investor Day to be held in Tokyo on Tuesday 03 March.
Despite accepting Franchise Partners’ proposal that the Kirin board consist, for the ﬁrst time in its history, of a majority of independent directors, the incumbent non-independent Kirin board on February 14 pre-emptively rejected Franchise Partners call for a review of KV 2027 by the independent board after it is established.
Franchise Partners had offered to withdraw all of its shareholder proposals if the Company agreed to accept its two candidates as truly independent directors and if Kirin’s KV2027 business plan were submitted to the new board for a “thorough and independent review.” The incumbent Kirin board rejected that offer without explanation, emphasizing that it remains firmly committed to KV2027’s diversification strategy.
Franchise Partners urgently requests clarification from Kirin management whether the new board will be given an opportunity to perform a “thorough and independent review” once elected. Such a review would be consistent with principle 4.1. of Japan’s Corporate Governance Code which states that the primary role of a board is to set the strategic direction of a company.
Franchise Partners also requests that Kirin management forthrightly address the following unanswered questions at the 3 March 2020 Investor Day:
Franchise Partners continues to believe that there are clear paths available to create a more valuable and sustainable Kirin that will serve the long-term interests of all of its stakeholders, most notably the divestment of its stakes in non-core, listed subsidiaries in the pharmaceutical (Kyowa Kirin) and skincare (FANCL) segments. Franchise Partners encourages fellow shareholders to present their concerns about the Company’s conglomerate “bridging strategy” directly to Kirin management at the investor day
Franchise Partners has created a website which can be found on the following link: www.abetterkirin.com. The website has a detailed presentation deck covering a range of topics including an introduction to Franchise Partners, detailing the challenges that face conglomerates, why Franchise Partners believe the stock market has reacted negatively to Kirin’s increased conglomerate status and what can be done to improve corporate governance and rectify the current substantial discount to fair value that currently afflicts the share price. Franchise Partners encourages all shareholders of Kirin to visit the website ahead of the company’s Annual General Meeting on 27 March 2020 in order to be fully informed of the background to the proposals that Franchise Partners has made at the upcoming AGM.