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Disagreements over the company’s management, including the handling of an accounting scandal, have put Toshiba at odds with its new investors, some of whom have pushed for changes to its board, including the addition of more independent directors.
Tensions increased further last year when voting irregularities at the annual general meeting led to shareholder revolt. Some investors blamed Mr. Nagayama, the former CEO and director of pharmaceutical giant Chugai who also served as Sony’s external director, after an internal investigation into hidden wrongdoing around problems at the company.
“Nagayama tried to position himself as a change agent, but he was there for a year and a lot happened that year, where he took no action,” Mr.
In March, Toshiba shareholders, dissatisfied with the internal report’s conclusions about the problems at the general meeting, forced the company to conduct a second independent investigation.
A proposal for new directors by Singapore-based Effissimo Capital Management has angered the Toshiba group of companies, according to an independent investigation. In response, the executives reached out to officials at the Japanese Ministry of Commerce to coordinate tactics aimed at making the company back down.
In talks with Ifissimo, Toshiba’s largest shareholder, ministry officials indicated that the hedge fund could be subject to investigation under the newly amended Foreign Investment Law to counter growing concerns about Chinese influence over Japanese companies.
When those efforts failed, the report said, the Commerce Department sent a representative to lobby Harvard University’s endowment fund, another investor in Toshiba. In the end, Toshiba made its way, and investors approved the list of its board members. The report concluded that the tactics did not affect the final outcome of the election, but were unfair nonetheless.
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