May 11, 2010

Aggressive Banker Is Focus of Feud Fujitsu’s Public Battle With Ex-President Involves Mr. Fusa and a Former Client

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TOKYO—The banker at the center of Fujitsu Ltd.’s public feud with its former president has a résumé to rival nearly anyone in Japan’s financial sector: degrees from prestigious universities—Waseda and Oxford—and impressive achievements as former head of mergers and acquisitions in Japan for UBS AG and Credit Suisse First Boston.
[FUJITSU] Bloomberg News

KojI Fusa, shown in 2002, has been accused by Fujitsu of gangster ties. He has declined recent requests to be photographed.

Koji Fusa, whom Fujitsu claims had possible gangster ties, has been an unusually aggressive figure in the staid Japanese banking world. In his years as an investment banker, he was known for a bold style of deal making, including hostile takeovers, largely shunned by other Japanese bankers, and he forged close links to the founder of a consumer-finance firm who was later convicted of wire tapping.

As an investor he has sometimes relied on risky financing methods, such as issuing bonds that give bondholders a larger stake in a struggling company as its stock price declines. Mr. Fusa says he has ceased to use that strategy since the global financial meltdown.

At a meeting in September with Fujitsu’s then-president, Kuniaki Nozoe, Fujitsu executives claimed that Mr. Fusa, the founding partner of a small hedge fund and private-equity firm, had gangster ties. At the executives’ urging, Mr. Nozoe, who had been negotiating the partial sale of a Fujitsu unit to Mr. Fusa’s firm, agreed to resign.

The 50-year-old Mr. Fusa, who lives in London, denies he or his businesses have links to organized crime. “This whole series of events is ridiculous,” he said in an interview at the austere apartment he was sharing with his wife and four daughters during a recent visit to Tokyo. “If they had done a little bit of research on us, they would have found out that we are actually quite a reputable organization.”

Mr. Fusa’s critics, who include some former rivals, say he has prospered by operating on the fringes of Japanese finance. His supporters, including an ex-colleague, say his willingness to push the envelope has upset more-conventional bankers, who are jealous of his success.

Mr. Fusa says his London-based hedge fund, Sandringham Capital Partners Ltd., has 15 billion yen ($161 million) under management, and his Tokyo-based private-equity firm, Sandringham Private Value KK, has a credit line of 60 billion yen from a major Japanese bank.

Sandringham Private Value has yet to do a private-equity deal. In what might have been its first, it was in talks to acquire part of a Fujitsu subsidiary. But the talks fell apart last year after Mr. Nozoe stepped down.

Mr. Nozoe says Fujitsu officials told him his dealings with Mr. Fusa and Sandringham put the Japanese technology giant at risk.

Fujitsu has cited what it says were Mr. Fusa’s ties to a firm with an “unfavorable reputation” as making Mr. Nozoe unfit to be Fujitsu’s president. Though it hasn’t identified Mr. Fusa or his firm publicly, it has named them in court documents.

Mr. Nozoe has said he plans to file a shareholder lawsuit against two Fujitsu officials he claims forced him to resign on false pretenses, and he has publicly attacked his former employer. A lawyer representing Mr. Fusa and Sandringham says they have no ties to organized crime. They have filed a defamation suit over the allegations against three Fujitsu board members.

In a statement, Fujitsu said it was told by “multiple” unidentified financial institutions that there were questions over whether the unidentified fund had gangster ties. Fujitsu says it used private investigators to look into those suspicions, but it says it has no evidence from Japanese authorities linking the fund to organized crime.

Mr. Fusa started his banking career working at two boutique banks in London. He joined S.G Warburg, now part of UBS, in Japan in 1990, and eventually became its local head of M&A.

Later, at CSFB’s Japan office, he would surprise clients by proposing aggressive deals, a former co-worker says, including hostile takeovers, which remain rare in Japan and were long considered taboo in the country’s consensus-driven corporate culture. By Western standards, this person says, Mr. Fusa was simply a creative banker.

Both UBS and Credit Suisse, as CSFB is now known, declined to comment. Credit Suisse is a unit of Credit Suisse Group.

“In my mind, I have never done anything dubious,” Mr. Fusa says.

He made a big splash in 1997, leading UBS’s rise to become Japan’s top equity underwriter, in rankings by Thomson Reuters, a first for a non-Japanese firm had overtaken domestic heavyweights Nomura Holdings Inc. and Daiwa Securities Inc. He capped that achievement.In 1998 he underwrote a 88-billion-yen secondary-share offering by consumer lender Takefuji Corp., which Nomura had taken public in 1996.

Some of the Takefuji shares were offered by Yasuo Takei, the company’s founder. Like the rest of the consumer-finance industry at the time, Takefuji was loosely regulated. Like its peers, it had a poor public image because it charged interest rates approaching 30% and had occasionally faced criticism for aggressive collection methods.

In 2006, Japan cracked down on Takefuji and the rest of the consumer-lending industry, following a Japanese Supreme Court ruling that the lenders were charging excessive interest rates. Japan imposed interest-rate ceilings and ordered the companies to refund some of the extra interest consumers had paid.

Frequent offerings of debt, and sometimes equity, made Takefuji a sought-after investment-banking client. Mr. Fusa says he eventually grew close to Mr. Takei, Takefuki’s chairman, after winning the company as a client.

Mr. Fusa “upset the order of things by beating other bankers to deals,” says Hideaki Nagamori, an ex-colleague from UBS and CSFB, who is now chief operating officer at technology firm Cybird Holdings Co.

Mr. Takei resigned as Takefuji chairman in 2003 after an arrest for wire tapping a reporter who wrote stories critical of the company. He was convicted in 2004 and given a suspended sentence. He died in 2006.

Court papers Fujitsu filed earlier this year in response to a petition by Mr. Nozoe to be reinstated as a Fujitsu director cited Mr. Fusa’s relationship with Mr. Takei as a reason for Fujitsu’s suspicion of Mr. Fusa and his firm. The documents were reviewed by The Wall Street Journal. A Takefuji spokesman declined to comment. Mr. Nozoe ultimately withdrew his petition.

“Everybody was looking to do business with Takefuji at the time,” says Mr. Fusa. “It was a typical relationship between a good client and an investment banker.”
—Cassell Bryan-Low in London and Juro Osawa in Tokyo contributed to this article.

Write to Daisuke Wakabayashi at


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