Toshiba shareholders on Thursday voted against a proposal to split the Japanese consortium into two, dealing with a new push for management that would likely cause further unrest for the troubled company.
The results of the ballot, held at an extraordinary shareholder meeting, are not mandatory, but Toshiba hopes to increase support ahead of a final vote next year on plans to spin off its electronic device unit.
The result is the latest setback for the engineering giant, which was once a symbol of Japan’s technology and business acumen but has faced multiple scandals, financial problems and shocking high-level resignations in recent years.
A proposal by a major Singapore-based shareholder to explore options, including a private move, was also rejected, but highlighted the stalemate between management and active investors over the company’s future.
At the end of the meeting, CEO Taro Shimada said, “Our company will review any and all strategic options to increase our corporate value, taking into account the views of shareholders.”
Details of how many votes each proposal received after both failed to gain a majority will be announced at a later date in a special report.
The plan to split Toshiba into two parts was revised from the earlier notion of a three-way split, which met with strong opposition from some investors.
Several major shareholders argued that a spin-off would only exacerbate Toshiba’s problem by creating more managing positions in smaller units rather than just improving the firm’s management.
The private equity fund follows an abandoned takeover offer from CVC Capital Partners last year that some would rather buy.
Singapore-based Ephesimo Capital Management, which owns 10 percent of Toshiba shares, opposed the spin-off plan before the vote, when Farlon Capital Management said a purchase would “end the spiral of distrust and restore the company. The future.”
Satoshi Sunakawa, a key figure in the spin-off proposal, abruptly resigned as CEO earlier this month after a short stint of less than a year. He is replaced by Shimada, who supports bipartisan division.
Foreign investors have kept Toshiba afloat, but have also pushed for faster growth and a clearer long-term strategy.
Travis Lundy, an analyst at Quiddity Advisors, who published in Smartkarma, told AFP before the vote that Toshiba’s “number one goal” is to “get rid of activists, get rid of them.”
“The problem is … employees have a specific mandate,” he said.