 "Toshiba")
Toshiba’s board appointed CEO Satoshi Tsunakawa as interim chairman on Friday after investors voted to oust his predecessor in a stunning rebuke for its collusion with the Japanese government against shareholders.
Tsunakawa’s appointment came after shareholders delivered a clear message to management by voting out Osamu Nagayama as chairman and another director over the handling of the scandal, which has put Japan's corporate governance under the microscope. “The company recognises the seriousness of the rejection,” of the two, Toshiba said in a statement.
The board said in a separate statement it had would identify a permanent successor for Tsunakawa and would consider external candidates and use a global executive search firm. It also said it would expand the scope of a newly-formed strategic review committee, which would undertake a full review of assets and devise a plan focused on creating growth via share buybacks and dividends.
The board said it would “engage with potential strategic and financial investors,” leaving open a possible further shake-up. Tsunakawa retook the helm in April after Toshiba's previous CEO left, but has said he does not plan to stay for too long.
Ousters of board members at Japanese companies, particularly household names like Toshiba, are extremely rare.
“This result is a sign of a paradigm shift in Japan and will only embolden activist investors whether foreign or domestic,” said Justin Tang, head of Asian research at United First Partners in Singapore.
But supporters of Nagayama say his failure to win re-election will only set back Toshiba further, depriving the industrial conglomerate, which has lurched from crisis to crisis since an accounting scandal in 2015, of experienced leadership.
A breakdown of the vote was not immediately disclosed.
One Toshiba source said foreign investors had voted in greater numbers than in previous shareholder meetings as they saw it as an important test case of corporate governance in Japan.
How the government responds has yet to seen, but so far Trade Minister Hiroshi Kajiyama has been unapologetic about his ministry's dealings with Toshiba, saying the policies it implemented were natural ones for the ministry to take. Toshiba makes defence equipment and nuclear reactors and is strategically important to the government.
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