The mostly U.S.-based shareholder s of Japan's largest homebuilder have re-elected the company's two highest-ranking officers — but with much reduced approval margins, in the face of criticism from two U.S. shareholder proxy advisory firms and the company's former chairman, who blame the officers for a $51 million fraud loss last year.

"The vote shows a significant vote of no confidence for a Japanese company, where overwhelming shareholder consensus is the norm," said William Uchimoto, Berwyn-based Berwyn-based U.S. counsel to Makoto Saito and other Japan-based lawyers representing dissident Sekisui House investors. "This is the start of a movement to remove Abe and Inagaki which will be in the form of litigation, regulatory and political pressure. These wheels already are in motion."

Running unopposed, Sekisui House Chairman Toshinori Abe received 69 percent of the vote, and vice chairman Shiro Inagaki 73 percent, while other directors supported by proxy advisors attracted over 95 percent approval from shareholders, according to attorneys for Isami Wada, who stepped down as the company's top board officer in January. Wada has since protested his former colleagues' failure to remove Abe and Inagaki as recommended by the company's personnel committee, which includes outside directors and auditors.

Sekishui House, a $2.2 billion (yearly sales) company that builds housing developments in the western and southern U.S. and Australia as well as Japan, has not published official vote totals. Executives in investor relations did not respond to messages seeking comment.

Recommending "No" votes against Abe and Inagaki were Glass, Lewis & Co. and Institutional Shareholder Services Inc. (ISS), two U.S.-based firms that advise investors on companies' annual director votes and other shareholder questions.

Both Glass Lewis and ISS cited the company's lack of transparency and effective management controls, following Wada's departure last winter and his replacement by Abe. Wada said an internal review by the personnel committee had blamed Wada for the company's $51 million loss to a fraudulent broker in its attempt to purchase a property for development near Tokyo's Gotanda rail commuter station, but added that Abe and Inagaki had been able to rally a bare majority of the full board, including management members, to control the company and force out Wada instead.

Sekisui House leaders insisted Wada's departure was voluntary. But after sending staff to investigate, the proxy services found Wada's concerns credible and said the company needed to do more to identify those responsible and take steps to get the money back and prevent a repeat — and urged investors not to vote for Abe or Inagaki.

Sekisui's ten largest investors include Japan-based Sekisui Chemical Co. and a Mitsubishi investment affiliate, plus large U.S. investment companies, including industry leaders BlackRock and Vanguard, which typically don't reveal their positions on individual company votes until months after the annual spring proxy-voting season.

Not all proxy service recommendations persuade investors to buck management. Marlton banker and retail-real estate mogul. Vernon Hill was re-elected as chairman of Metro Bank Plc in the U.K. with more than 96 percent of the vote — more than some fellow directors received — despite the opposition of Glass-Lewis and an index fund investor who didn't like Metro's practice of paying Hill's wife Shirley's design firm, InterArch, for its work setting up new branches. Metro officials — and investors agreed with Hill that this money is well spent.

By contrast, Safeguard Scientifics, the Radnor-based tech investment firm, accepted the departure of chief executive Stephen Zarrilli and agreed to add two management critics, Philadelphia investor Ira Lubert and former Carl Icahn lieutenant Russell Glass, to its board, in order avoid a contested election threat from dissident investors in this year's elections. (Glass has no connection to Glass Lewis.)