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Ascender Capital Calls For Improved Capital Allocation Policy At Sumitomo Densetsu

Ascender Capital Limited, a Hong Kong-based value orientated hedge fund, is a long-term shareholder currently owning approximately 0.8% of Sumitomo Densetsu Co., Ltd. In alignment with the aims of the Japan Stewardship Code and global best practice, Ascender Capital has been engaging with Sumitomo Densetsu since November 2017, asking the board to address key governance and capital allocation issues. FY 2018 was a stellar year for Sumitomo Densetsu as the company continued its trend of consistent profitability and improving margins. Revenue increased 7% and operating income increased almost 20%. Nevertheless, Ascender Capital’s analysis shows that poor oversight of capital allocation issues is causing...