TOKYO: Britain's Asset Value Investors Ltd. plans to urge Japanese elevator maker Fujitec Co. to engage in drastic reform to raise its corporate value, Chief Executive Officer Joe Bauernfreund told Jiji Press on Monday.

The demands will include selling cross-held shares and boosting corporate governance.

"If we don't see that we're getting any response from the company, and we're not seeing any steps towards considering what we suggested, then we will have to resort to shareholder proposals," Bauernfreund said.

Asset Value Investors is known as an activist investor. It submitted shareholder proposals to Teikoku Sen-i Co. and Tokyo Broadcasting System Holdings Inc..

Fujitec, based in Hikone, Shiga Prefecture, western Japan, is listed on the first section of the Tokyo Stock Exchange.

Asset Value Investors owns a 3.4 pct equity stake in the company. It has asked Fujitec to improve its management.

The investment firm switched to making public its detailed analyses of Fujitec and comprehensive proposals after the elevator maker did not give a clear response to the requests.

Bauernfreund said that Fujitec's manufacturing process is inefficient, that its profitability is low compared with competitors and that its corporate governance was insufficient.

He called for higher capital efficiency, the establishment of a nominating committee for board members and stronger management oversight by outside directors.

"We think it's a positive way to engage with management," the CEO said, adding that the proposals will be made public Tuesday.

Fujitec said that it will consider how to respond to any shareholder proposal after examining its contents.

JIJI Press