Governance For Yutaka Foods Corp

Toyo Suisan’s Responsibility as Parent Company

As Toyo Suisan owns a 51% stake in Yutaka and is the controlling shareholder, it has responsibility to ensure that good corporate governance systems are in place, not just for Toyo Suisan, but also for its listed subsidiary.

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General Principle 4 of the Corporate Governance Code (“CGC”) states that “Controlling shareholders should respect the common interests of the company and its shareholders and should not treat minority shareholders unfairly, and accordingly, companies with a controlling shareholder are required to develop a governance system to protect the interest of minority shareholders.”

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Currently there are no particular system has been put in place to manage this inherent conflict of interest, and the lack of good corporate governance systems at listed subsidiary is extremely damaging for the reputation of Toyo Suisan, as a leading international consumer food products company.

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As a parent company, Toyo Suisan should fulfil its duty to supervise its subsidiaries, disclose the rationale for maintaining Yutaka as a subsidiary from the perspective of improving corporate value and capital efficiency of the entire Toyo Suisan group. If Toyo Suisan is not supportive of improving Yutaka from a corporate governance perspective, then it should not keep Yutaka as a separate listed entity.