Toshiba Corp shareholders voted to oust Chairman of the Board Osamu Nagayama in a rare triumph for activist investors seeking fundamental reform after years of scandal and allegations of mismanagement.
The surprise decision on Nagayama, the 74-year-old outside director some investors opposed publicly, came after a contentious meeting with shareholders that extended for nearly three hours.
His departure marks a high point in the months-long campaign by largest shareholder Effissimo Capital Management Pte. to probe the company’s governance. An investigation prompted by its efforts uncovered alleged collusion with top government officials to influence last year’s board selection.
On Friday night, Toshiba named Chief Executive Officer Satoshi Tsunakawa as interim chair and said it will consider internal and external candidates for a successor.
Toshiba’s shares spiked as much as 1.7% before ending largely unchanged Friday. While investors hailed the vote as a promising sign of change, the larger task of resuscitating the ailing 145-year-old giant remains ahead. Beyond finding ways to revive revenue growth, the new leadership will have to rebuild shareholder trust.
Once a storied name in Japan, Toshiba has faded dramatically after years of management missteps. It paid a record fine in an accounting scandal and then lost billions on a bungled foray into nuclear power.
The conglomerate invented flash memory three decades ago, but was forced to sell most of its prized chip business in 2018 because of losses in its nuclear-power operation. That deal led to an infusion of cash — but also a large contingent of more vocal shareholders.
One open question for Toshiba is the future of Kioxia Holdings Corp., its former memory-chip division in which it still holds the biggest stake. The company has sought to go public via an initial public offering, Bloomberg News has reported.
Toshiba may have a chance to improve company governance, revamp its mid-term plan and accelerate a planned IPO of memory-chip arm Kioxia on the surprise ouster of chairman Osamu Nagayama by shareholders.