Photo/IllutrationKinya Seto, far left, former chairman and CEO of the Lixil Group Corp., holds a news conference on April 5. (Hideki Kitami)

A battle royal is shaping up at a major housing equipment manufacturing group as current and past chief executive officers prepare to slug it out over corporate control at a shareholders' meeting set for June.

Kinya Seto explained April 5 that he would submit an executive board member proposal that would restore him as CEO of Lixil Group Corp.

He was ousted in November and replaced by Yoichiro Ushioda, who had held the post until seven years earlier.

Ushioda is part of the family that established the predecessor company to the Lixil Group and also serves as chairman of the parent company.

However, institutional investors with sizable stakes in Lixil were apprehensive about Ushioda's management skills and called for an extraordinary shareholders' meeting to discuss removing Ushioda and other board members.

Investors expressed concerns about a lack of transparency in the behind-the-scenes maneuvers to dump Seto and replace him with Ushioda. Seto was recruited by Ushioda in 2016 to serve as CEO because of his past executive managerial feats.

However, Seto confided in a number of Lixil board members that he felt frustrated because he often did not agree with Ushioda's management style.

At the April 5 news conference, Seto admitted that he had griped to other executives but said that should not be construed as wanting to resign. He blamed himself for intimating to other board members that he wanted to step down.

Seto also outlined a personnel proposal he was planning to submit at the regular shareholders' meeting in June that would keep Keiichiro Ina, another Lixil board member, in his post. Ina belongs to the family that established Inax Corp., which later became part of the Lixil group.

The proposal lists Seto, Ina and Ryuichi Kawamoto as three of the four in-house board members who would continue in their posts. It also names four outsiders who would be asked to join the board, including Kaoru Onimaru, a former Supreme Court justice.

The primary arrow in the proposal is to replace the current board members to ensure greater corporate governance at the Lixil Group.

Under the current setup, Seto is supposed to step down as a board member at the June meeting.

But if his proposal is accepted, he would not only continue in that post, but also return as CEO.

Seto indicated he would vote with the institutional investors at the extraordinary shareholders' meeting, which is expected to be held in May, to oust Ushioda as CEO.

Lixil Group uses a nomination committee to decide executive positions, but no details have been released about who the committee wants to serve as board members and which proposal would be presented at the June meeting. Seto and his allies plan to lobby the nomination committee to side with him, but if the overture is refused, they plan to submit the proposal as one from shareholders at the June meeting.

At the April 5 news conference, Seto admitted that he had been rash in resigning. He was visiting Italy in October when Ushioda called him and said the nomination committee had decided to choose a new CEO and asked Seto to step down.

Lawyers who scrutinized the process behind Seto's resignation compiled a report that said the main points of contention between Seto and Ushioda were a plan to move company headquarters from Tokyo to Singapore and to have management buy back shares of the company to gain greater control.

Seto made clear he was opposed to both of those proposals and that apparently led to the moves by Ushioda to oust Seto.

At the news conference, Seto also criticized Ushioda's management style. Noting that Ushioda resides in Singapore and only returns to Japan once a month or so, Seto said it was inconceivable to be absent from Japan for so long in light of the fact that about 70 percent of the Lixil Group's business is in Japan.

Past history may be part of the reason for the internal discord. The Lixil Group was established in 2011 through a merger of five housing equipment and materials companies, including Inax and Tostem Corp., which was established by Ushioda's family.

(This article was written by Miho Tanaka and Yasuaki Oshika.)