A man uses a mobile phone outside a 7-Eleven convenience store in Tokyo
A man uses a mobile phone outside a 7-Eleven convenience store in Tokyo, Japan December 6, 2017. Reuters

ValueAct Capital is pushing to oust Seven & i Holdings President Ryuichi Isaka, saying he is responsible for a "flawed strategy" and stating publicly for the first time that he is one of four directors it wants to replace at next month's annual meeting.

The San Francisco-based investment firm, which owns a 4.4% stake in the convenience store operator, is ratcheting up the pressure by saying publicly that Isaka has acted in bad faith since becoming president in 2016.

"It is time to find a new President for Seven & i," ValueAct wrote to Seven & i shareholders in a letter dated April 20. The letter also criticizes the board for having failed to conduct a succession review for Isaka.

Seven & i said in a statement that it is "currently reviewing the contents of the letter".

ValueAct said Seven & i recorded meetings with its team without its consent, violating privacy laws around the world. Then it leaked audio from a March 15 meeting to a news outlet, the investment firm said.

ValueAct declined to comment beyond the contents of the letter.

ValueAct has long been critical of the company's conglomerate structure, calling for a spin-off of the 7-Eleven convenience store chain or for a sale of the entire company.

Seven & i earlier this week said its board will oppose all director candidates nominated by ValueAct, including Dene Rogers, a former executive at RadioShack and Sears, and Brittni Levinson, ValueAct's sustainability chief.

Tensions have escalated for weeks and a number of large investors backed ValueAct's push for the company to explain its corporate structure and answer a series of questions during its earnings call earlier this month.

This week the company called ValueAct's spin-off proposals "short-sighted" and "based on superficial understanding" of its businesses, while stressing various steps it has taken such as the divestiture of the department store business.

LightStream Research analyst Oshadhi Kumarsasiri said Seven & i had made efforts to accommodate Value Act's proposals for more than two years and doubted the latest actions would further influence its approach.

"We believe that Seven & i will continue to dispose of underperforming business units at their preferred pace, and it is unlikely that activist investors will be able to exert significant pressure on them regarding this matter," he wrote in a note on the Smartkarma platform.