“I THINK THIS will be theatrical, and we are concerned that it will be sensational,” a senior official at Japan’s Ministry of Economy, Trade and Industry (METI) warned an activist fund last year. The investors were pushing to put more outside directors on the board of Toshiba, a titan of Japanese industry. In the event, it was Toshiba’s management that caused a sensation. An independent investigation published this month alleges that the company worked with government officials to squeeze shareholders ahead of its annual meeting in 2020. The fallout from the pressure campaign has already helped fell the chief executive, Kurumatani Nobuaki, and several board members. As the 145-year-old conglomerate prepares for this year’s shareholder meeting on June 25th, its fate hangs in the balance.
Once a world-famous brand that manufactured Japan’s first incandescent light bulbs and invented flash-memory data storage, Toshiba is now notorious mostly for scandals. Following a big accounting fraud and a ruinous investment in an American nuclear-energy company, it almost went bankrupt in 2017. It had to sell the prized memory-chip business and issue new shares, putting the majority of the firm in the hands of foreign investors. Effissimo Capital Management, a secretive fund based in Singapore and run by two long-time Japanese activist investors,…
Original Source