Tensions within Toshiba's board of directors erupted into a public outcry on Monday (6th). Two external directors criticized each other on corporate governance and the nomination of hedge fund executives to the board of directors. According to Reuters on the same day, this is the latest rift in a protracted crisis. In this crisis, the management and shareholders fell into a dispute about the future of the company. This may weaken investors' confidence in the company's board of directors as the annual general meeting is approaching.
Mariko watahiki, an external director of Toshiba, pointed the spearhead at her colleague Raymond Zage, saying that Zage disagreed with the position of the board of directors in March and instead supported the shareholder's proposal that the company seek a takeover offer from a private equity company, thus raising concerns about Toshiba's corporate governance. Katsunori Hashimoto, another external director, expressed the same view.
The report quoted them as saying that Zage's move "damaged shareholders' confidence in the board of directors and raised concerns about corporate governance". In a statement to Reuters, Zage defended his actions, saying that these criticisms were misleading, and his actions received a positive response from shareholders.
Another company document also confirmed that watahiki, a former high court judge, had objected to two director nominations supported by the board of directors. Earlier, Reuters reported on Friday that she had raised an objection, and the company would rarely disclose her objection.
Zage said in a statement to Reuters: "(this is) inaccurate, incomplete and misleading, indicating that the author did not take into account a large number of positive feedback from shareholders and the contents of the substantive discussions on this matter held by the board of directors before and after the public statement."
Toshiba declined to comment.
Zage is also the chairman of the nomination committee. The two nominated candidates for directors are respectively from Elliott management and Farallon capital managemen. Zage was the managing director of Farallon before and still serves as an adviser. Watahiki officially opposed the two candidates.
Watahiki said on Monday: "there are two directors associated with Farallon, which makes the board seem to favor one activist shareholder and one specific shareholder." She believes that in the contract with Elliott, Farallon failed to ensure that conflicts of interest were avoided and that independence and confidentiality were fully ensured.
Since 2015, Toshiba has been caught up in an accounting and governance crisis and has had disputes with activist shareholders, some of whom want to privatize it. Toshiba said last week that it had received eight preliminary proposals to privatize it and two capital alliance proposals, which would make it listed. (checked by / indrich)