Pickens Trades Barbs With President of Koito : Japan: The latest round of the clash over the Texan’s 26% stake in the auto parts maker is expected to occur at a shareholders meeting this week.
The president of Koito Manufacturing Co. exchanged accusations Monday with T. Boone Pickens Jr., the auto parts maker’s largest shareholder, in a dispute over whether Pickens really owns the shares registered in his name.
Four days before an expected confrontation at a shareholders meeting, Koito President Takao Matsuura sent Pickens a letter asking him to explain why a declaration of his investment firm’s assets, filed with Delaware regulators, failed to list about $950 million in Koito shares that Pickens says he owns.
Matsuura accused Pickens of acting as an agent of Kitaro Watanabe, an auto dealer who, Matsuura charged, has twice attempted to coerce Koito into buying back his shares at a premium price, a practice known as greenmail.
Matsuura demanded that Pickens, who bought the shares--26% of Koito’s equity--from Watanabe, explain “the full nature of your alliance” with the auto dealer.
Pickens responded by declaring that his firm, Boone Co., filed an amended report, including the value of the Koito shares, on June 12.
“If they think they found a smoking gun, it just blew up in their face,” Pickens said in a statement. “Koito and its boss, Toyota, which runs the corporate cartel that controls Koito, continues to try to divert attention from the real issue here.”
Pickens, who has demanded that his representatives be given four of the 20 seats on Koito’s board, went on to say: “The real reason Toyota doesn’t want Americans on Koito’s board is because it would upset the cozy cartel system that keeps corporate Japan closed to outside investors and competition.”
Toyota, the second-largest of Koito’s shareholders, with 19%, and a major customer for its products, has three seats on its board.
Matsuura said Pickens’ 39.4 million shares were worth $950 million at the rate of exchange effective on the last day of 1989, the date on which Delaware requires that firms incorporated there list their assets in an annual tax report. Boone Co. listed only $1,935,014 in assets.
Andrew Littlefair, a spokesman for Pickens, said Boone Co. later found that an accountant had “inadvertently” listed only American assets. The amended report put Boone’s assets at $916,674,740, Littlefair said. He said the value of the Koito shares was calculated at their purchase price, not their market value.
Richard Wolff, a lawyer representing Koito, said the Delaware secretary of state, with whom the report must be filed, had not received an amended filing from Pickens as of last Friday.
“If he filed it, let him produce it,” Wolff said.
Pickens’ office sent a copy of the amended report to the Los Angeles Times’ Tokyo bureau. Wolff charged that “even if he did file (the amended report), it still does not prove that he is the actual owner of the shares.”
Pickens replied: “I bought the shares, and they are mine. My name is on them, and I have no plans to sell them. Koito transferred the shares to us, and they know I own them.”
Pickens, a Texas oilman who made a series of takeover bids against U.S. oil firms in the mid-1980s, said he had signed “a sworn affidavit” declaring that Boone Co. “has no interest in, and will not accept, greenmail.”
Matsuura said Pickens has refused to disclose how he obtained the shares from Watanabe. He called that “irresponsible and cynical . . . while professing piously to advocate shareholder rights.”
In April, 1989, Watanabe was fined for failing to report to the Finance Ministry his accumulation of more than 10% of Koito’s stock, as required by law.
Although U.S. regulations require proof that a shareholder purchased shares “with his own money,” Japanese regulations do not, Wolff said.
Pickens said he will attend the Koito shareholders meeting Thursday, and nearly 50 other American shareholders are also reported planning to be there. Pickens said he will present seven proposals, all of which are expected to be rejected.
