Toshiba shareholders rejected management’s proposed plans to split the company in two after a meeting on Thursday.
As part of this plan, Toshiba intended to keep its infrastructure and service entity as a single entity, and split the digital devices part into two.
The company explained that the decision to separate into two independent companies was made after a “thorough review” by the board of directors of its reorganization plan and its processes.
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“After engaging with key stakeholders and performing additional analysis, we have determined that separating Toshiba into two stand-alone companies and divesting certain non-core assets is in the best long-term interests of our company, its shareholders, customers, business partners and employees,” said Satoshi Tsunakawa, interim president and CEO of Toshiba, in February.
Prior to this, Toshiba intended to split into three standalone companies.
The restructuring plans had been touted by the Japanese conglomerate as a way to secure sustainable profit growth and boost shareholder value and confidence, following months of corporate turmoil, including the ousting of its chairman Osamu Nagayama by its shareholders in June.
Another director who was on Toshiba’s audit committee, Nobuyuki Kobayashi, was also ousted in the shareholder vote at the company’s annual general meeting last year.
It was the first general meeting since an independent investigation, validated by the shareholders, revealed that the company had colluded with Japanese officials to prevent certain shareholders from exercising their right to vote during the general meeting of Last year.
Osamu Nagayama previously penned an open letter expressing his “deep regret” over Toshiba’s conduct and pledging to be an agent of positive change.
The investigation, conducted by three lawyers, revealed that Toshiba had “devised a plan” with officials from the Ministry of Economy, Trade and Industry to prevent Effissimo Capital Management, which owns 9.9% of the shares. of Toshiba, to exercise certain shareholder proposals at Toshiba’s annual general meetings.
During Thursday’s meeting, shareholders also rejected a separate proposal from Singapore-based shareholder 3D Investment Partners to consider alternative options.
“Toshiba accepts the shareholder views expressed at the EGM and will do its utmost to build trust with shareholders and reconsider its strategic options to continuously improve corporate value,” the company said.
Source: ZDNet.com