ReportGungHo Online Entertainment
Supplementary Explanatory Materials Regarding the Opinion of the Company’s Board of Directors on Shareholder Proposals: GungHo Online Entertainment
9 pages~8 min full read
GungHo Online Entertainment’s board has unanimously rejected all shareholder proposals from Strategic Capital and LIM Japan Event Master Fund for the 2026 Annual General Meeting.
See it on page 1The board rejected shareholder-return proposals that would have distributed approximately 57% of the company's cash and deposits, labeling the demand as excessive.
See it on page 3GungHo maintains a capital return policy targeting a 4% dividend-on-equity (DOE) and a minimum 50% consolidated payout ratio, including a ¥90.00 per share dividend for FY 2025.
See it on page 4The company plans to execute a treasury-share acquisition of up to ¥5 billion, representing approximately 3.9% of issued shares, to support long-term value creation.
See it on page 4GungHo is increasing its board independence, with the proportion of outside directors set to rise from 40% to 50% following the 2026 AGM.
See it on page 7The board dismissed governance and disclosure proposals, asserting that current internal controls, audit procedures, and reporting practices already satisfy all regulatory requirements.
See it on page 5GungHo Online Entertainment’s board opposes all shareholder proposals presented by Strategic Capital and LIM Japan Event Master Fund at the 2026 Annual General Meeting. The board’s stance centers on preserving corporate value through prudent financial management and robust governance structures.
For shareholder‑return proposals, the board cites that two proposals would divert roughly 57 % of cash and deposits to dividends or treasury‑share buybacks, deemed excessive relative to the company’s operating environment. GungHo maintains a balanced return policy: a 4 % dividend‑on‑equity (DOE) target alongside a consolidated payout ratio of at least 50 %, with an ordinary dividend of ¥90.00 per share for FY 2025 and a planned treasury‑share acquisition up to ¥5 billion (≈3.9 % of issued shares). The board argues that these measures align with capital efficiency and long‑term value creation.
Governance proposals were rejected on the basis that GungHo already has a strong independent director framework—currently 40 % outside directors, rising to 50 % after the AGM—and that appointing an outside chair or chairman would undermine operational leadership. The board also defends its current dividend determination process, which allows flexibility between shareholder and board resolutions.
Other proposals, including changes to remuneration disclosure, sales‑by‑title reporting, and investigations into alleged misconduct, were dismissed because GungHo’s existing internal controls, external audit procedures, and disclosure practices already meet regulatory standards. The board concluded that none of the proposals would enhance corporate value, justifying its unanimous opposition.
