Fujita Resigns From Board of Sun Savings

Agriculture executive Tad Fujita resigned Friday as a director of Sun Savings & Loan Assn., two days after a dissident shareholder demanded that Fujita step down because of his conviction on two felony counts in 1973.

Fujita resigned voluntarily after discussions with both state and federal regulators, Sun President and Chief Executive John McEwan said. Fujita, owner of Fujita Farms in Westminster, “came to the conclusion that it was in everyone’s best interests” that he should resign,” McEwan said. Fujita could not be reached for comment.

No decision has yet been made on filling the board vacancy, McEwan said.

Fujita’s criminal record was apparently unknown to federal and state regulators and Sun officials until Wednesday, when dissident shareholder Robert Blake, a Newport Beach developer, called for Fujita’s resignation after he discovered the felony convictions.

Both federal and state laws prohibit anyone who has been convicted of crimes “involving dishonesty or breach of distrust” from serving as an S&L; director.

Fujita, while a planning commissioner for the City of Westminster, was convicted of conspiracy to commit grand theft and attempted grand theft in 1973.

Authorities had accused him and former Westminster Mayor Derek McWhinney of trying to obtain $10,000 from a farmer in exchange for a renewal of his lease on 213 acres of land in Fountain Valley. Fujita served 80 days in jail in 1975 and was placed on probation for three years.

Blake, a longtime board dissident, said Friday that Fujita “did the right thing by resigning” but added that Sun should ask Fujita to return all of the directors fees that he received.

“And if he has any loans (with Sun), those should be repaid or moved to other institutions,” Blake said.

In addition, Blake said, Sun should review the loans made during Fujita’s 18-month tenure on the board’s loan committee.

Fujita has received $8,800 in directors fees for attending board and committee meetings so far in 1985 and has had “no loans with Sun since I’ve been here,” according to McEwan, who joined Sun six months ago.

McEwan said that Blake’s call for a return of the directors fees was “totally off the wall and ridiculous” and that his suggestion of a loan committee review is “unnecessary.”

Fujita “was a dedicated board member (and) a tough negotiator who challenged the board and made everybody think. He’s earned every dime and more of those fees,” McEwan said.

Regulators previously have expressed concern over why they were not aware of Fujita’s criminal record. Federal authorities typically require only founding directors of savings and loans to file “biographical forms,” which would reveal prior criminal records. State regulators in the past have had similar requirements but recently tightened their guidelines and now ask new directors of existing S&Ls; to complete such questionnaires.

Fujita filled out annual questionnaires as part of Sun’s proxy statement filing process, but those documents only require disclosure about criminal convictions in the previous five years.

Earlier this week, Fujita, through his former criminal attorney, said that he had “truthfully” completed regulator-required questionnaires that dealt only with activities in the past five years.

Fujita was slated to be a founding director of Seaside Savings & Loan Assn. of Mission Viejo in 1979, but the S&L;’s outside counsel, the Los Angeles law firm of Leff & Mason, advised the company against it because of Fujita’s past, according to sources who were close to Seaside. “But they didn’t say why,” one source recalled.

However, Fujita later joined Seaside’s board and became a director of Sun when it was merged with Seaside in late 1982.

(Interestingly, Leff & Mason serves as outside counsel to several S&Ls;, including Sun. In addition, John Grosvenor, Sun’s new executive vice president, was most recently affiliated with the Los Angeles law firm.)

After Fujita served his jail term, his record was expunged, meaning that there is no public access to his criminal file. It was this expungement that prevented Seaside’s outside counsel from knowing the details of Fujita’s record, sources said Friday.

The Fujita controversy is the latest in a string of imbroglios to engulf Sun in the past 16 months. Two chairmen have resigned, including ousted Chief Executive Daniel W. Dierdorff, whose financial activities are under investigation by both federal regulators and prosecutors.

Fujita’s voluntary departure avoids the specter of federal and state regulators ordering his resignation and of Sun being forced to call a special shareholders meeting to oust him. Both would have added to an already embarrassing situation, Sun sources said.

The swift resolution of the Fujita affair could prove to be a feather in the cap of McEwan, who has made boosting Sun’s below-regulatory-minimum net worth and returning the company to profitability high priorities since he took over earlier this year.

Dealing forcefully and quickly with Fujita’s resignation could help McEwan push through his capital infusion plans, some of which are controversial, according to sources close to Sun.

The Fujita controversy also likely will add to the increased push for disclosure by state Savings and Loan Commissioner William J. Crawford. “We’ll be tougher in the future,” Crawford said Friday. “We’ll get biographies and fingerprints and probably financial statements” from new directors.