Heads roll at KHI as board torpedoes Mitsui merger

kawasaki grabtiffJUNE 14, 2013 — A management integration of Japan's Kawasaki Heavy Industries and Mitsui Engineering and Shipbuilding Co is not going to happen. And the three Kawasaki executives who were pressing for it have been demoted to the role of "directors under the supervision of the President."

New Kawasaki Heavy Industries President Shigeru Murayama

As we reported in April (see earlier story) a merger would have created a shipbuilding and heavy engineering giant with, according to newspaper Asahi Shimbun, "1.8 trillion yen ($18 billion) in revenue, putting it in second place behind industry leader Mitsubishi Heavy Industries Ltd."

Be that as it may, the idea was apparently not too appealing to Kawasaki board members, in view of the fact that shipbuilding accounts for less than 10 percent of the firm's total revenue.

Broacaster NHK reports that yesterday "Kawasaki's chairman Tadaharu Ohashi and nine other executives approved an urgent motion to fire President Satoshi Hasegawa and two others executives."

The board elected Shigeru Murayama as its new president.

A statement from Kawasaki Heavy Industries said yesterday that it was correcting "certain announcements it has previously made" and had "terminated all negotiations regarding management integration with Mitsui Engineering and Shipbuilding Co., Ltd."

The Board said that, "not taking into account the votes of the personnel in subject," it had "unanimously passed resolution to dismiss Mr.  Satoshi Hasegawa, Mr. Mitsutoshi Takao and Mr. Masahiko Hirohata from their former positions of President, Senior Executive Vice President, and Senior Vice President respectively to Directors under supervision of President.

"This replacement is due to arbitrary management actions of the above personnel in neglect of the view of the majority of the Board of Directors.

"The Board had but to deem such actions questionable and unaligned with what the Board considers as good corporate governance and compliance, and made appropriate decisions."

Want more? Subscribe now!

News from NASDAQ