UPDATE 2-Fujitsu shares fall in row over ex-president’s exit

* Fujitsu shares down 4.3 pct, biggest loser in the Nikkei

* Fujitsu changes reason for ex-president Nozoe’s resignation

* Fujitsu: Nozoe link to firm with “unfavourable reputation”

* Nozoe, through lawyer, has contested Fujitsu claims

* TSE: looking into Fujitsu’s disclosure on issue
(Adds TSE comments)

By Taiga Uranaka

TOKYO, March 8 (BestGrowthStock) – Shares of Fujitsu Ltd (6702.T: ),
Japan’s largest IT services firm, fell more than 4 percent on
Monday amid a dispute with former president Kuniaki Nozoe over
the circumstances that led to his abrupt resignation last year.

The Tokyo Stock Exchange said it was checking with Fujitsu on
why it changed the reason for Nozoe’s resignation, announced in
September after he had spent just 15 months in the top post.

Fujitsu said on Saturday it had now dismissed Nozoe as an
adviser and that the main reason for him stepping down as
president was not illness, as it stated at the time, but his
association with a firm whose group was said to have an
“unfavourable reputation”. [ID:nTOE624087]

Nozoe, through lawyer Kei Hata, has contested Fujitsu’s
claims and sought to have his resignation nullified to “restore
his honour”, saying he was forced out for false reasons. Hata
told Reuters his investigation did not find the company in
question to have improper links.

Nozoe could not be reached for comment.

The tussle between Nozoe and Fujitsu management threatens to
disrupt the firm at a time it is rushing to cut deals and
restructure to keep pace with global rivals in the computer
services sector, and could invite scrutiny over its disclosure.

“Investors fear management disputes like this may slow down
restructuring efforts,” said Yumi Nishimura, deputy general
manager of investment strategy at Daiwa Securities Capital

But she and others said the impact of the public standoff
between Nozoe and Fujitsu would be limited unless it escalates.

“It’s not good for Fujitsu’s image, but it’s not as if it’s
the current management that has been hit by scandal,” said Naoki
Fujiwara, a fund manager at Shinkin Asset Management. “I don’t
see a big impact on its earnings.”

TSE spokesman Kazuhiko Yoshimatsu said it was still unclear
if the exchange would take any punitive action.

Fujitsu says the problem stems from a project Nozoe was
working on around February 2009 that involved an outside company
whose representative director was a long-time acquaintance.

Fujitsu said it discovered that the company was part of a
group that had an “unfavourable reputation” and conducted an
investigation. It said it determined that dealings with the
company would be inappropriate and that Nozoe agreed.

However, Nozoe continued to have relations with the company,
Fujitsu said in the statement, without elaborating on the nature
of that relationship. At the same time Fujitsu said Nozoe had not
committed any illegal acts.

Fujitsu shares fell 4.3 percent to 559 yen by midday, the
biggest percentage loser among Nikkei 225 average (.N225: )
components. The benchmark gained 1.7 percent on strong U.S. jobs


(Reporting by Taiga Uranaka; Editing by Edwina Gibbs and Michael

UPDATE 2-Fujitsu shares fall in row over ex-president’s exit