Corp Gov. for GMO Internet

GMO Internet, Inc. (“GMO Internet” or “the Company”), one of the leading internet companies in Japan, was founded in 1991 by Masatoshi Kumagai, who today serves as the Company’s Representative Director and President. GMO Internet provides various internet-related services, from internet infrastructure services to cryptocurrency mining services.

GMO Internet’s stock price has increased in the past few months, backed by expectations for its new cryptocurrency mining business.  However, the Company is valued at less than the value of the stake it owns in its listed subsidiaries (GMO Payment Gateway, Inc., GMO Financial Holdings, Inc., GMO CLOUD K.K., GMO Pepabo, Inc., GMO Media Inc., GMO Research, Inc., GMO TECH, Inc. and GMO AD Partners, Inc.).

  Sources:  Company disclosure, Bloomberg.   Note:  Market data as of Jan-18  -2018.

Sources:  Company disclosure, Bloomberg.   Note:  Market data as of Jan-18-2018.

One of the key reasons for GMO Internet’s undervalued stock price is its governance structure. This is evidenced in the latest general shareholder meeting on May 10, 2017, where the majority of minority shareholders appear to have voted against Mr. Kumagai’s reelection to the Board of Directors.

  Source:  Company disclosure   Note:  Assumes Mr. Kumagai has voted for all candidates including himself with his and his asset management company’s voting rights.

Source:  Company disclosure   Note:  Assumes Mr. Kumagai has voted for all candidates including himself with his and his asset management company’s voting rights.

In light of these concerns, we sent proposals on GMO Internet’s strategic implementation and governance restructuring to the Company’s Board of Directors. Despite our efforts, we have not received formal response to our proposals. The Company's senior management and Board have not made themselves available to meet with us to discuss these issues, though we have made multiple requests. 

Therefore, we have concluded that GMO Internet may not be able to carry out governance restructuring expediently on its own, and decided to submit our shareholder proposal for a general shareholders meeting for the fiscal year ended December 2017.

We have confirmed that there are other major shareholders who share our views in regard to our proposals.


Oasis shareholder proposal

proposals related to abolishing the takeover defense measure

Agenda Item (1) – Abolishment of policy for large scale purchase of the Company’s shares.

Agenda Item (2) – Partial amendment of the articles of incorporation (introduction method for Takeover Defense Measures).

 

proposals related to Governance restructuring

Agenda Item (3) – Partial amendment of the articles of incorporation (change to the system for company with nominating committee, etc.).

Agenda Item (4) – Partial amendment of the articles of incorporation (Prohibition of concurrent posts of president and chairperson of the Board of Directors).

Agenda Item (5) – Partial amendment of the articles of incorporation (election of directors by cumulative voting). 

Agenda Item (6) – Setting compensation amount for directors (excluding Audit and Supervisory Committee Members, and hereinafter the same in this Agenda Item unless particularly noted otherwise) (meaning adoption of a compensation structure linked with the interests of minority shareholders).

See Oasis's shareholder proposal to GMO Internet

 

For all inquiries or comments from shareholders or employees, please contact at GMOCorpGov_Shareholders@hk.oasiscm.com.