February 8, 2023

The ouster of the Toshiba leader marks a turning point for foreign investors in Japan

Disagreements over the management of the company, including dealing with accounting corruption, have left Toshiba in conflict with its new investors, some of whom have made changes to its board, including the appointment of more independent directors.

Tensions escalated last year when voting irregularities at a public meeting led to a partner uprising. A former investor and director of the pharmaceutical company Sukai, Mr. Some investors blamed Nagayama, who also served as an external director at Sony, following an internal investigation into allegations of irregularities in the company.

“Nagayama tried to position himself as an agent for change, but he was there for a year, a lot happened that year, where he didn’t take action,” Mr. Saripas said.

In March, Toshiba shareholders were dissatisfied with the results of an internal report on issues at the public meeting, forcing the company to conduct a second independent inquiry.

Singapore-based Epicmo Capital Management’s proposal for new directors opposes Toshiba’s corporate package, according to an independent investigation. In response, executives approached officials from Japan’s Ministry of Commerce.

In talks with Toshiba’s largest shareholder, Epicimo, ministry officials pointed out that hedge funds could be investigated under the newly amended Foreign Investment Act to address growing concerns about Chinese influence over Japanese companies.

When that attempt failed, the report said the Commerce Ministry sent a representative to put pressure on another Toshiba investor, Harvard Endowment Fund. Eventually, Toshiba found its way, with investors approving its board members. The tactics did not affect the final outcome of the election, the report concluded, but was unfair.