GungHo Shareholders Reject Proposal to Dismiss President

Tokyo, Sept. 24 (Jiji Press)–Shareholders of GungHo Online Entertainment Inc. voted down on Wednesday a proposal to dismiss director Kazuki Morishita, its president and CEO, which had been put forward by Tokyo-based investment company Strategic Capital Inc. At GungHo’s extraordinary general shareholder meeting in Tokyo on the day, Strategic Capital, which holds an 8.5 pct stake in the online game developer, claimed that Morishita has been unable to create hit products since Puzzle & Dragons was rolled out and that his compensation is excessive. Strategic Capital called for Morishita’s resignation and highlighted the need to overhaul GungHo’s development system, in which the company leader has centralized power. GungHo opposed the proposal. “(The rejection of the proposal) was regrettable, but we’d like to continue dialogue with the GungHo management,” Strategic Capital President and CEO Tsuyoshi Maruki told reporters after the shareholder meeting. During the meeting, GungHo shareholders approved by a majority vote a proposal from the company and Strategic Capital to effectively reduce to a majority the number of voting rights required to pass a resolution to dismiss a director. The meeting, which lasted one hour and 50 minutes, was attended by 52 shareholders, with 11 of them asking questions. END [Copyright The Jiji Press, Ltd.]