Latest news with #KobayashiPharmaceutical
Japan Times
08-07-2025
- Health
- Japan Times
Despite leadership changes Kobayashi Pharma still struggling with reform
Kobayashi Pharmaceutical remains only halfway through overhauling its corporate governance, as it struggles to restore public trust following the revelation of health problems linked to some of its dietary supplements more than a year ago. In an effort to move past its troubled legacy, the Osaka-based company has replaced its president twice and appointed an external chairman. These steps were intended to reduce the influence of the founding family, whose dominance has been widely seen as a root cause of the scandal. The family is believed to hold a 30% equity stake in the company and wields significant influence, posing a formidable barrier to meaningful internal reform efforts. In March last year, Kobayashi Pharmaceutical reported a series of health issues, including cases of kidney disease, among consumers who had taken dietary supplements containing beni kōji, rice fermented with red yeast. In response, the company has been compelled to review its management structure, compensate affected individuals and investigate the root cause of the problem. A report by an independent fact-finding committee comprising external attorneys concluded that then-President Akihiro Kobayashi "failed to take the lead on conducting a product recall or issuing a warning to ensure consumer safety." Following these findings, the company announced in July the same year that both Kobayashi and his father, Chairman Kazumasa Kobayashi, would resign from their positions. Satoshi Yamane, who was promoted from senior managing director to president the following month, described the company's corporate culture up to that point as one of "homogeneity" centered around the founding family. He noted that this culture had led to an overreliance on the Kobayashi family, and initiated efforts to reduce management's dependence on the family and foster a more diverse and resilient leadership structure. But in January this year, Yamane announced his resignation as president, with Executive Officer Norikazu Toyoda succeeding him. Additionally, three of the four outside directors decided to step down. As a result, five of the seven directors, including outside directors, who were in office when the beni kōji issue emerged have now left their positions. To further strengthen its leadership, Kobayashi Pharmaceutical has appointed Yoshihito Ota, known for his role in the management turnaround of Japan Airlines, as chairman following Toyoda's promotion to president. While the embattled company is highlighting progress in its management reforms, fully distancing itself from the founding family remains a significant challenge. Former Chairman Kazumasa Kobayashi continues to serve the company as a special adviser, while former President Akihiro Kobayashi now holds the position of director in charge of compensation. Oasis Management, a Hong Kong-based investment fund that owns 10% of Kobayashi Pharmaceutical's outstanding shares, has been critical of the company's management since last autumn. At an extraordinary shareholders' meeting in February, Oasis Management proposed its own slate of directors, but the proposal was rejected by a majority vote. In an unexpected turn of events in March, shareholders rejected a proposal by management to amend the company's articles of incorporation at the annual meeting. The proposed revision had been intended to advance governance reform. Currently, the articles of incorporation stipulate that the chairman and president serve as co-chairs of the board of directors. Management's proposal sought to change the provision so that, in principle, the chairmanship of the board would be held by an outside director. The proposal was rejected primarily because shareholders from the founding family voted against it, highlighting their significant influence over the company. In a recent interview, President Toyoda reflected on the outcome of the March general shareholders' meeting. He acknowledged, "We should have held more discussions to gain support from the founding family" regarding the proposed changes to the articles of incorporation. "The founding family also understands the importance of governance reform," he added. Toyoda expressed confidence that future internal reforms, compensation for victims and the implementation of measures to prevent a recurrence of the health issue would not be affected. In May, Kobayashi Pharmaceutical published its first newspaper advertisement since the scandal broke, and in June it resumed television commercials. With compensation for the victims still incomplete, however, consumer confidence in the company is still low. "We have yet to see whether (the resumption of commercials) will actually bring back customers," Toyoda said.
Japan Times
04-06-2025
- Business
- Japan Times
Kobayashi Pharmaceutical vows never to repeat health scare
The head of Kobayashi Pharmaceutical has promised that it will never cause health damage again, following a high-profile scare last year caused by its supplements containing beni kōji, or red fermented rice. "I will continue to urge our workers to never repeat" such health hazards, President and CEO Norikazu Toyoda said in a recent interview, held after taking office in March. Toyoda plans to renew the company's personnel systems to prioritize human resource development, as part of efforts to strengthen product quality controls. In March 2024, the drugmaker, based in Osaka, announced that it had received a series of reports about such symptoms as kidney disease from users of its supplements. "We have caused problems for our customers and business partners," Toyoda reiterated, suggesting that his company will continue focusing on providing compensation to victims and taking thorough preventive measures. "Risk control was conducted loosely through our production processes," Toyoda explained, after puberulic acid from blue mold was mixed in the cultivation process for beni kōji. He emphasized that the company will work to allocate personnel skilled at quality examinations and analyses at production sites, while hiring midcareer workers. Referring to the personnel systems to be revamped in December, Toyoda said that the company needs to evaluate employees who will be promoted as specialists. The company renewed its management by promoting Toyoda to president and CEO, bringing in outsider Yoshihito Ota as chairman. Toyoda said he believes that the company's management culture has been changing gradually, noting that "outside directors are also speaking up actively."
Japan Times
29-01-2025
- Business
- Japan Times
Hong Kong fund to sue former Kobayashi Pharma execs
Hong Kong-based investment fund Oasis Management said Tuesday that it plans to file a damages lawsuit against the former chairman of Kobayashi Pharmaceutical and others over a high-profile health hazard scandal involving supplements containing beni kо̄ji red fermented rice. In the shareholder derivative suit, the fund will seek a total of roughly ¥11 billion ($70.6 million) in damages from former Chairman Kazumasa Kobayashi and six others who were board directors when the issue came to light. It argues that the then executives were responsible for the scandal and that they caused damage to the Japanese drugmaker, in which Oasis Management has a 10.1% stake. The fund called on Kobayashi Pharmaceutical last November to file a damages suit against the former chairman and others, but the request was denied. It has described the company's refusal as being unacceptable. Kobayashi Pharmaceutical said in a statement Tuesday that it has not confirmed that a derivative suit has been filed. Oasis Management is boosting its efforts ahead of the drugmaker's extraordinary shareholders meeting on Feb. 19, proposing the appointment of outside directors.
