The shareholders at the crisis-ridden tech company, Toshiba Corporation, decided to vote out its short-running board chairman, Osamu Nagayama, and one of the group's directors, on Friday, June 25.
The company's firm reprimanded the former chairman's activities after he was confirmed to have conspired with the government to suppress foreign investor interests.
The Toshiba Government Collusion
Toshiba former chairman Osamu Nagayama was under fire for his extra-curricular activities with the government -- the Toshiba government collusion.
According to Bloomberg, the governance scandal broke out when a rare public account posted about how Japan's bureaucrats allegedly collaborated with a private company to get a hold of foreign shareholders.
Toshiba's largest shareholder, Effisimo Capital Management Pte., said that the Japan-based company's issue clearly shows an ineffective board of directors and dysfunctional corporate governance.
How Toshiba Former Chairman Osamu Nagayama Tried to Retain His Position
On June 25, Toshiba's former chairman Osamu Nagayama tried extremely hard to convince various shareholders that he deserved another chance to run the 145-year-old company.
In a letter dedicated to Toshiba shareholders, Nagayama stated that it is his priority to provide the Japan-based company with the leadership and governance it deserves.
He added that he would continue being an agent of positive change and not protect the current status quo.
Despite Nagayama's attempt to win enough votes from Toshiba investors, he did not succeed in remaining as the crisis-ridden Japanese corporation's chairperson.
Toshiba Share Price
CNBC reported that Toshiba's share price regained its earlier losses, and it is now up by 1.3% after ousting former chairman Osamu Nagayama.
A Toshiba source told CNBC that foreign investors decided to vote in more significant numbers than the company's previous shareholder meetings. It was made so because investors perceived it as an essential hurdle of corporate governance within Japan.
However, CNBC mentioned that the source was not allowed to speak to the media publicly and refused to be identified.
What Is Next for Toshiba?
The annual general meeting's result marks a brand-new watershed moment for Japan's corporate governance. Activist Toshiba shareholders were able to secure a probe in the allegations of pressure on various overseas investors.
However, CNBC mentioned that former chairman Osamu Nagayama's supporters believe that his inability to remain as the company's chairman will set Toshiba further back.
According to his supporters, it will be a loss for Toshiba because the industrial conglomerate has successfully lurched from numerous crises since 2015. His unutilized experience in leadership will cost Toshiba severe damage.
So far, Toshiba has not yet released a detailed breakdown of the vote. The board will be meeting soon to discuss who will be nominated as the new chairman of Toshiba Corporation.
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Written by Fran Sanders
