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Toshiba : Notice of Disclosure of Investigation Report Prepared by Law Firm and Opinion Prepared by Audit Committee

06/21/2021 | 04:11am EDT

June 21, 2021

Toshiba Corporation


Notice of Disclosure of Investigation Report Prepared by Law Firm

and Opinion Prepared by Audit Committee

As announced in "Notice Regarding the Date and Venue and the Agenda of an Extraordinary General Meeting of Shareholders, and the Opinion of the Company's Board of Directors on the Shareholder Proposals" dated February 17, 2021, in response to receiving "Written Demand to Call a General Meeting of Shareholders" from Effissimo Capital Management Pte Ltd and Suntera (Cayman) Limited as Trustee of ECM Master Fund (collectively, "ECM") on December 17, 2020, Toshiba Corporation ("Toshiba") has conducted an investigation on so-called "Pressure Issue" at the Audit Committee by engaging Nishimura & Asahi Law Office as an assistant to which a part of the investigation was commissioned. The Audit Committee received an "Investigation Report" and an "Additional Investigation Report"(collectively, the "Law Firm Report") both dated February 17, 2021 as the results of the investigation by Nishimura & Asahi Law Office, and also based on the investigation conducted by the Audit Committee itself, the Audit Committee submitted the "Audit Committee's Opinion in regard to ECM's Demand for Convocation of General Meeting of Shareholders" (the "Audit Committee Opinion") to the Board of Directors Meeting held on February 17, 2021 as the results of the Audit Committee's investigation.

Toshiba has not disclosed the results of the Audit Committee's investigation (including the results of the investigation by Nishimura & Asahi Law Office) thus far as it has references to the conduct of third parties including the performance of public duties by the administrative authorities.

However, Toshiba received and disclosed an Investigation Report dated June 10, 2021 (the "Investigators Investigation Report") from the "persons who will be charged to investigate the status of the operations and property of the stock company as set forth in Article 316, Paragraph 2 of the Companies Act" who were elected at Toshiba's Extraordinary General Meeting of Shareholders held on March 18, 2021, and as the conduct of third parties including the performance of public duties by the administrative authorities has been already referred to in the Investigators Investigation Report, Toshiba decided that there is no reason to keep the results of the Audit Committee's investigation undisclosed and hereby announces to disclose the Law Firm Report and the Audit Committee Opinion as attached (Note).


Toshiba sincerely accepts the points made in the Investigators Investigation Report about the operation of the 181st Ordinary General Meeting of Shareholders. Toshiba will strive to drastically improve its corporate governance and to improve its corporate value.

(Note) Some of the proper nouns in the Law Firm Report have been anonymized upon the disclosure.



Law Firm Report (Investigation Report)

Investigation Report

February 17, 2021

To: Toshiba Corporation, Audit Committee

Nishimura & Asahi


Takashi Shibuya


Jun Katsube


Keita Asano


Hitoshi Imaizumi

Per request of the Toshiba Corporation, Audit Committee, our firm has conducted an investigation of the matter described below ("Investigation"), and herein makes a report of the results as follows.

The request for convocation of extraordinary general shareholders meeting dated December 17, 2020 from Effissimo Capital Management Pte Ltd ("Effissimo") and Suntera (Cayman) Limited as Trustee of ECM Master Fund states that "some shareholders abstained from exercising their voting rights in response to pressure" at the Toshiba Corporation ("Toshiba") 181st annual general shareholders meeting held on July 31, 2020 ("General Shareholders Meeting"). If Mr. M ("Mr. M"), who was an advisor to the Ministry of Economy, Trade and Industry ("METI") at the time, did interfere improperly with the exercise of the voting rights of Harvard Management Company, Inc. ("HMC"),1 as reported in the Reuters article dated December 24, 2020, 2 whether Toshiba was involved in such interference, and any matters related to the same.



HMC is an institutional investor operating the Harvard University endowment fund.

Article entitled "Japan government adviser pressured Harvard with talk of probe before Toshiba vote -sources".

Table of Content

  1. Overview of the Investigation ············································ 3


Background and Purposes of the Investigation ·························· 3

  1. Relevant News Reports ············································· 3
  2. Request from Effissimo, etc. ········································· 4
  3. Request for Investigation by Toshiba's Audit Committee·················· 4
  1. Period Subject to Investigation ······································ 4
  2. Method of Investigation ············································ 5
    1. Detailed Review of Related Materials etc.·························· 5
    2. Interviews ··················································· 5
    3. Email Data Review ············································ 6
  3. Reference Date for Investigation ····································· 6

II. Facts Found as a Result of Investigation ··································· 6

  1. Facts that can be Found Based on Evidence ···························· 6
    1. Requests, Proposals, etc. from Effissimo and Other Shareholders Prior to the General Shareholders Meeting ······························· 6
    2. State of Enforcement of Amended FEFTA Prior to the General Shareholders Meeting, etc. ······································ 7
    3. Exchanges etc. between METI and Toshiba before the General Shareholders Meeting·········································· 9
    4. State of Communications between HMC and Toshiba before the General Shareholders Meeting········································· 10
    5. Toshiba's Understanding Regarding the Course of Events Leading to Mr. M's Involvement ············································· 10
    6. Toshiba's Understanding Concerning Communications between Mr. M and Harvard···················································· 11
    7. Communications between HMC and Toshiba after the General Shareholders Meeting········································· 12
  2. Whether Toshiba Improperly Interfered or was Involved in Improper Interference with HMC's Exercise of Voting Rights ····················· 12
  3. Conclusion ······················································ 13
    • 2 -
  1. Overview of the Investigation

1 Background and Purposes of the Investigation

(1) Relevant News Reports

A Financial Times article dated September 15, 20203 reported the following, broadly speaking. (a) Because Toshiba was hoping to sway shareholders4 and proxy-advisory firms, Mr. M had private discussions with HMC CEO ("HMC CEO") concerning HMC voting intentions at the General Shareholders Meeting. (b) Effissimo conducted a survey of shareholders asking whether they had voted "in a manner inconsistent with intentions," and the results suggested that some shareholders may have felt undue pressure to change their votes. (c) Mr. M and HMC CEO held an online meeting about two weeks before the General Shareholders Meeting, following which HMC decided to abstain from voting. (d) a financial advisor ("FA"), which had been retained by Toshiba to handle activists, told Toshiba before the M-HMC CEO meeting that the ballot would be extremely close, and identified HMC as one of the potential swing votes. (e) Mr. M told HMC CEO, in their meeting, that because of Toshiba's deep connections within the Japanese government, a "no" vote could have an impact on HMC's reputation. (f) Toshiba retained FA in order to sway the opinions of proxy-advisory firms.

In addition, the Reuters article dated December 24, 2020 reported the following, broadly speaking.

  1. Mr. M, who was appointed advisor to METI in May 2020, knew that HMC was frustrated over Toshiba's corporate governance, and approached his acquaintance HMC CEO a few weeks before the General Shareholders Meeting. (b) Exchanges between Mr. M and HMC CEO were conducted by phone and email, and the initially amicable discussions deteriorated on the weekend before the General Shareholders Meeting, and Mr. M told HMC CEO that if HMC exercised voting rights in a manner opposed to Toshiba, it could be investigated under the Foreign Exchange and Foreign Trade Act ("FEFTA"). (c) Mr. M specifically mentioned HMC's relationship with Effissimo and HMC in his exchanges with HMC CEO (on the assumption that the FEFTA newly required that notice be given when multiple foreign shareholders reach agreement and jointly exercise voting rights in a listed company, if said shareholders hold a total 10% or more of the voting rights in said company). (d) Mr. M wrote on Twitter, "I am an advisor to METI and a senior fellow at Harvard, and I enjoy a longstanding trust relationship with the Harvard endowment fund, on which basis my input is frequently sought. It is deeply regrettable that this article, which is based on testimony from anonymous sources, would create the impression that I threatened CEOs and CIOs on behalf of METI



Article entitled "Former Japan GPIF investment chief intervened in Toshiba AGM". Unless otherwise noted, "shareholders" means Toshiba shareholders; hereinafter the same.

- 3 -

This is an excerpt of the original content. To continue reading it, access the original document here.


Toshiba Corporation published this content on 21 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 June 2021 08:10:02 UTC.

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