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Burndy-US did not control Burndy-Japan’s presidents, Kambe
and Hijikata, from 1973 to 1993. Burndy-US disapproved of Kambe
and Hijikata as presidents and yet did not remove either of them
from office until 1993. In 1993, Burndy-US removed Hijikata
after Burndy-US had increased its stock ownership in Burndy-Japan
from 50 percent to 90 percent. This suggests that Burndy-US
lacked control before 1993.
Petitioners concede that Burndy-US disapproved of Hijikata
as president, but they contend that Burndy-US did not disapprove
of Kambe. Farley described Kambe as honest, practical, and
protective of the interests of Burndy-Japan. Farley recalled two
instances in which Burndy-US deferred to Kambe. Petitioners
contend that Farley’s testimony shows that Burndy-US did not
disapprove of Kambe. We disagree. Cantor credibly testified
that Farley was dissatisfied with Kambe as president.
Petitioners contend that Burndy-US controlled the three
Burndy-US employees, the president, and the five Burndy-Japan
employees who were members of the board. We disagree. Burndy-US
presumably controlled the three Burndy-US employees who were
directors. However, the record does not show that Burndy-US
controlled the five Burndy-Japan employees who were selected as
directors by unanimous agreement of the shareholders.
Petitioners contend Furukawa and Sumitomo agreed in 1973 to
give Burndy-US complete control over Burndy-Japan. We disagree.
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