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18 January, 2021Euromoney, January 18 2021
To have one of your leading shareholders demand an extraordinary general meeting is unfortunate. Two looks like a pattern. Japanese corporate giant Toshiba is facing a messy situation.
Received wisdom has it that corporate Japan is changing. The days of trophy acquisitions for status rather than shareholder value are behind us, we are told. Today’s corporate titans listen to shareholders, divest non-core assets and focus on their core strengths.
Broadly, that has been the direction of recent years, as illustrated by Olympus, Fujitsu, Takeda Pharmaceuticals and more broadly by Japan’s corporate governance code. Until recently, Toshiba, troubled but rebuilding, was thought to be part of that welcome new direction.
But now there are doubts, which have crystallized in some alarming ways.
In December, Toshiba’s two biggest shareholders, independently of one another, called for emergency shareholder meetings for different reasons.
One, Effissimo Capital Management, is seeking an investigation of the firm’s AGM on July 31, at which it is alleged that Toshiba’s third-largest shareholder, Harvard Management Company, was pressured into abstaining in an action that had direct consequences for a knife-edge vote on Toshiba’s management.
The other, Farallon Capital Management, wants clarity on the group’s long-term acquisition strategy after reacting with alarm to a November update that appeared to put aside a long-agreed restructuring plan in favour of more ambitious, landmark purchases.
On the sidelines of all of this is Goldman Sachs, which has been appointed to a defensive advisory role. Not, as is commonplace, a defensive advisory role against, say, a hostile takeover but a defensive advisory role against Toshiba’s own shareholders.
This is unfamiliar territory.
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