Investor Seeks Shake-Up at Toshiba -- WSJ
2018年9月1日 - 4:02PM
Dow Jones News
By Kosaku Narioka
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 1, 2018).
TOKYO -- New York-based hedge fund King Street Capital
Management LP has proposed new independent directors at Toshiba
Corp., according to people familiar with the matter, the first
indication of dissatisfaction among the foreign funds that bought
into the Japanese industrial conglomerate last year.
King Street is one of the biggest shareholders in Toshiba,
amassing a 5.2% stake, according to a regulatory filing on May 29.
As of March 31, 72% of Toshiba's shares were held by non-Japanese
investors, according to the company.
The relationship between Toshiba and its non-Japanese
shareholders could be an indicator of how shareholder activism is
changing company management in Japan. Calls by Prime Minister
Shinzo Abe's government for shareholder-friendly management and
better corporate governance have been drawing the interest of
foreign investors.
The names of the director candidates proposed by King Street and
the hedge fund's rationale for seeking a board shake-up couldn't be
learned. One person with knowledge of a letter sent by King Street
to Toshiba said it was a friendly approach. Another foreign
investor familiar with King Street's proposal said his team
supported installing new independent directors.
A King Street representative declined to comment. Toshiba
representatives didn't respond to requests for comment.
Toshiba has been going through a tumultuous period since an
accounting scandal came to light in 2015. The company suffered big
losses when its U.S. nuclear subsidiary, Westinghouse Electric Co.,
went bankrupt in March 2017.
To fill a capital shortfall and avoid a delisting from the Tokyo
Stock Exchange, Toshiba agreed in September 2017 to sell its
cash-cow memory-chip unit to a group led by U.S. private-equity
firm Bain Capital, and it raised some $5.3 billion from foreign
investors by issuing new shares in December 2017.
After delays, Toshiba completed the chip-unit sale in June 2018
and announced a $6.3 billion share buyback using the proceeds.
In April, former banker Nobuaki Kurumatani took over as
Toshiba's chief executive. Some foreign investors think he should
do a bigger share buyback and carry it out more quickly. So far,
Toshiba hasn't said when the buyback will happen.
At Toshiba's annual shareholder meeting in June, Mr. Kurumatani
was elected as a Toshiba director, but with only 63% support.
Since the accounting problems, Toshiba has restructured its
board by reducing the number of directors and boosting the number
of outsiders. Currently, seven of its 12 directors are
independent.
Toshiba has sold many of the businesses that used to be
associated with its brand name, including personal computers,
television sets and medical devices. Still, the 143-year-old
company remains one of the best-known in Japan with more than
132,000 group employees and $35 billion in annual revenue.
Julie Steinberg and Cara Lombardo contributed to this
article.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
September 01, 2018 02:47 ET (06:47 GMT)
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