TOKYO, March 1 – Toshiba Corp. (6502.T) said on Tuesday that CEO Satoshi Tsunakawa had resigned, a sudden departure after sources said revised restructuring plans sparked opposition to the company. in addition to the long-standing anger of shareholders.
However, the new interim CEO Taro Shimada said the company would continue to follow its current break-up plan as it was approved by the board.
Initial plans announced last year by the scandalous conglomerate to split into three have been widely criticized by foreign hedge fund shareholders – many of whom support the sale of a private investment company. But last month’s revised plan, which called for the break-up of two companies and the sale of other businesses, also met with internal disagreement, according to two sources familiar with the matter.
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There were concerns within Toshiba that the planned sale of units such as the elevator business would leave the company with only low-margin businesses, said sources who were not authorized to speak to the media and declined to be identified.
Asked about the internal opposition, Toshiba said she firmly believed that its announced reorganization plan was the best option for the company, but declined to comment further.
For some observers, the departure of Tsunakawa, as well as Mamoru Hatazawa, a board member who insisted on splitting the company, adds to doubts about whether Toshiba will be able to continue with plans to break up.
“The split plan will be reviewed – we believe there is a chance it will be lifted,” said Justin Tang, head of Asian studies at investment adviser United First Partners in Singapore.
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The appointment of Shimada, a former CEO of Siemens AG (SIEGn.DE), which only joined in 2018, represents a significant change of security at Toshiba, helping the company’s stock end 2% higher.
Toshiba also said that Goro Yanasse, Toshiba’s elevator business manager, will be appointed interim chief operating officer.
The board will monitor the performance of new recruits and the state of business performance, and “where appropriate, the board will continue discussions on the appointment of external candidates,” the statement said.
While Tsunakawa returned to the post of CEO on a temporary basis and said he did not expect to be in the long-term position, the timing of the announcement was a surprise.
Raymond Zage, head of Toshiba’s nomination committee, said the new appointments were made at the time, after some shareholders expressed concerns that management did not appear to be able to continue plans to restructure the company in a timely manner.
An extraordinary general meeting, which will seek initial shareholder approval for the revised dissolution plan, is scheduled for March 24th. Shareholders will also vote on Toshiba’s major shareholder proposal to explore other options and request buyout offers from private investment companies. Read more
The initial breakup plan was announced last November after a five-month strategic review after years of accounting scandals and governance problems that undermined investor confidence and saw Toshiba’s market value more than halve, to about $ 18 billion, from its peak. of the 2000s.
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Report by Makiko Yamazaki and Junko Fujita; Additional reports from Anshuman Daga in Singapore; Edited by Edwina Gibbs
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