Toshiba Corp. President and CEO Nobuaki Kurumatani stepped down Wednesday, the company said, amid an internal conflict over a proposed buyout of the Japanese industrial conglomerate by British private equity firm CVC Capital Partners.
Chairman Satoshi Tsunakawa takes up the posts of Kurumatani, Toshiba said following an extraordinary board meeting. Kurumatani, 63, a former chairman of CVC's Japan unit, joined Toshiba in 2018 and pushed ahead with drastic reforms.
CVC's proposal to take Toshiba private, widely seen as being solicited by Kurumatani in a bid to fend off pressure from foreign activist investors calling for more transparent management, is opposed by some board members, sources close to the matter have said.
The purchase of Toshiba would cost more than 2 trillion yen ($18 billion) and require screening by the Japanese government for national security reasons because Toshiba's businesses include nuclear power and defense equipment while support from existing shareholders is also a key.
Kurumatani has seen his support from shareholders dwindle. At the general shareholders meeting in July, 57.96 percent supported Toshiba's move to keep him in the post, down from 99.43 percent a year earlier, according to Toshiba.
Last month, Toshiba held an extraordinary shareholders meeting at the request of foreign activist investors. A proposal by Singapore-based Effissimo Capital Management Pte. Ltd. was approved, a rare victory for shareholder activism in corporate Japan.
The fund had called for a fresh investigation into whether Toshiba's general shareholder meeting last year was held fairly since shareholder services provider Sumitomo Mitsui Trust Bank mistakenly omitted some mailed-in votes.
Toshiba has spent years trying to improve its governance and has undergone restructuring since an accounting scandal in 2015, followed by the bankruptcy of U.S. nuclear plant subsidiary Westinghouse Electric Co. two years later.
© Kyodo News International, Inc., source Newswire