top of page

Sekisui House's former chairman, "we have a good chance of winning"

Asahi Shimbun

Shiro Matsuda

April 16, 2020


Mr. Isami Wada, former Chairman of

Sekisui House |  February 17, 2020, Tokyo

The general meeting of shareholders of Sekisui House, which attracts attention due to the  conflict between former Chairman Isami Wada and the current management team, will be held on April 23, 2020.  Mr. Wada accepted a telephone interview with an Asahi Shimbun journalist.  Mr. Wada said “we have a good chance of winning," and revealed that a U.S. investigation agency was interested in the company management's involvement in the land fraud case.


The conflict was triggered by the land fraud incident in which Sekisui House was defrauded of about 5.5 billion yen by a "fraudulent landlord group" over a land transaction in Tokyo in 2017.  Mr. Wada, who failed to dismiss Mr. Toshinori Abe, was dismissed by the current management team.  In February this year, he made a shareholder proposal in cooperation with Mr. Fumiyasu Suguro, director and senior managing officer, to replace the management team.  Mr. Wada argues that the incident was an improper transaction led by Chairman Abe.  Mr. Wada plans to return to the board of directors and investigate the incident as well as to promote management reforms.  However, it is not yet clear how many shareholders will support the proposal.


Glass Lewis and ISS, the U.S. voting advisory firms with significant influence over overseas shareholders, recommended earlier this month to vote against Chairman Abe and Vice Chairman Inagaki.  However, the ISS recommended to vote against Mr. Wada.  The company was opposed to the shareholder proposal’s argument saying that it did not conduct any improper transaction, and criticized the shareholder proposal that “it may unnecessarily cause confusion in the management of the Company."


How does Mr. Wada see the current situation?


  • The general meeting of shareholders is coming up.  How do you feel?


We are renewing our determination to improve the governance of Sekisui House by any means.

In fact, on the night of March 19th, I got a phone call from the FBI and they talked to me for about an hour.  I can't say exactly who that was, but it was a special agent.  Regarding the land fraud, the agent was suspecting that it was a money laundering.


  • What were their questions?


I cannot go into details, but he said it was a "classic money laundering" due to the fact that a number of deposit checks were used and a shell company intervened.  The U.S. is very sensitive to such cases to prevent terrorist financing.  For some reason, they asked me about the relationship between MUFG Bank, which issued the checks, and Vice Chairman Mr. Inagaki.

Sekisui House has many overseas shareholders.  According to a U.S. lawyer I know of, what happened at Sekisui House is classified in the U.S. as the "second Olympus case".  A director who pursued to investigate a fraud got dismissed by other directors who wanted to cover up the fraud.  I told the FBI everything I know.


  • How is the investigation going?


I don't know the details, but after the call to me, the FBI seems to have called Fumiyasu Suguro, director and senior managing officer of Sekisui House.  The FBI agent said to me that he would cooperate with Japanese law enforcement agencies, and he said, "Please assist us with the investigation.”  I am concerned that this investigation could impact Sekisui House since people will continue to doubt that Sekisui House may have accommodated money laundering.


  • Earlier this month, Glass Lewis recommended to vote for your four slate directors including yourself, but ISS recommended to vote against you.  Any thoughts?


The two firms agreed that Chairman Abe and Vice Chairman Inagaki should be responsible for the absence of governance at Sekisui House.  It's embarrassing that I didn't realize when I was Chairman but if you read the report made by outside directors, you can see that Sekisui House crossed a street against the red light about 10 times.  Obviously they did an improper transaction.  The entire management team should be replaced.


  • President Yoshihiro Nakai commented on the ISS recommendations saying, "Overall, ISS supported the Board of Directors of the Company rather than the shareholders who made the shareholder proposal."


Both of the voting advisory firms recommended to vote against Mr. Abe and Mr. Inagaki, and the company only commented on the ISS recommendations.  Glass Lewis said NO to all the four including President Nakai and Executive Vice President Takashi Uchida.  It is shameful that the company makes such a thin excuse.  They might have completely lost the idea of how people outside of the company are seeing the company.  I know that under the current management employees cannot freely speak up, which could cause serious problems.

The management is seeking shareholders’ support citing the record earnings for the last fiscal year, but they are only making it look better by selling off assets developed over the past several years.  It will cost them a lot in the future.


  • What have you been doing to gain support for your shareholder proposal?


All we are doing is just to tell the shareholders that this is a crusade for corporate governance in Japan.  Unlike the company, we cannot approach cross-shareholding partners or business partners.  We are making phone calls to a number of shareholders.  We have presented our revenue and earning goals in three years for shareholders to understand what the company will be like.  I sense that our supporters are growing.


  • Is there a chance to win at the general meeting of shareholders?


We have a good chance.  If the company wins, it won’t be good for the corporate governance in Japan.


  • You are pursuing the responsibility of the current management team, but are you not responsible for promoting Mr. Abe and nominating him as your successor?


I cannot say no.  It is the biggest stain of my life.  I did not realize back then.  He did not say anything to me.  But I later learned that he was extremely unpopular in that he shifts his faults onto his subordinates.

I should have listened to other people’s voices more carefully.


  • How would you have dealt with the land deal if you were the primary person in charge?


After the incident, I went to see the old inn on the site, and I was surprised to find a haunted house there.

I would not do the deal if my deal counterparty became a shell company or if multiple deposit checks, with the largest one being for several billion yen, had to be used to settle the deal.  Mr. Abe should be responsible but the deal could not have been completed without Mr. Inagaki’s approval to issue checks.


  • What would you do if your shareholder proposal did not gain support from the shareholders?


Even if we lose at the shareholders’ meeting, it will not end our crusade or the investigation into the improper transaction by the current management.

bottom of page