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Support for Toshiba CEO tumbles in shareholder vote – Metro US

Support for Toshiba CEO tumbles in shareholder vote

The logo of Toshiba is seen as shareholders arrive at
The logo of Toshiba is seen as shareholders arrive at Toshiba’s extraordinary shareholders meeting in Chiba

TOKYO (Reuters) – Toshiba Chief Executive Nobuaki Kurumatani may have held onto his job but a breakdown of voting results at last week’s shareholder meeting showed a precipitous slide in support to just 58% from 99% a year earlier.

And while two activist funds fell short in their bid to add a total of 5 nominees to the board, one nominee – Yoichiro Imai, the co-founder of activist fund and Toshiba’s top shareholder Effissimo Capital Management – gained substantial backing with 43% of the vote.

Both results, disclosed on Tuesday, indicate that pressure from activist funds on the beleaguered Japanese industrial conglomerate is likely to remain for some time.

Singapore-based Effissimo, which owns a 9.9% stake, had sought additional directors, citing fictitious transactions Toshiba disclosed this year as evidence that its corporate governance has not made significant progress since a major accounting scandal in 2015.

Proxy advisers Institutional Shareholder Services Inc and Glass, Lewis & Co had sided with Toshiba, arguing that the current management team is relatively new and diverse.

Toshiba has been under pressure from activist funds since it sold 600 billion yen ($5.6 billion) of stock to dozens of foreign hedge funds during a crisis stemming from the bankruptcy of its U.S. nuclear power unit in 2017.

Effissimo and other activist funds hold about 30% of Toshiba’s voting rights. Foreign shareholders in total account for about 60%. Toshiba added seven new independent directors last year at the urging of U.S. hedge fund King Street Capital.

(Reporting by Makiko Yamazaki; Editing by Edwina Gibbs)

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