TOKYO (Reuters) – Toshiba Corp. shareholders voted Thursday to support an independent investigation into allegations that investors were pressured ahead of last year’s annual general meeting – the expected impact of rainfall which would encourage greater shareholder activity.
The vote marks only the fourth time a shareholder move has been approved in Japan and the first by a major company that has a house name, albeit deceived by a string of scandals.
It is also notable for the seriousness of allegations that surfaced after the AGM. Some Toshiba shareholders had been feeling the pressure to vote in line with the regulators ’desire to nominate leaders following communications from a government adviser or trade ministry, sources have previously told Reuters.
“This result shines very public attention on the likelihood of campaigners using EGMs, which may be reported in Japan at only 3% for 6 months,” he said. Nicholas Benes, corporate governance expert and production director of the Japan Board of Training Institute.
The proposal from Effissimo Capital Management, Toshiba’s active investor and largest shareholder, was backed by proxy advisors and needed a simple majority of votes at Thursday’s extraordinary general meeting. A breakdown of the results of the vote was not immediately published.
Reuters has reported that Harvard University ‘s endowment fund was told by a Japanese government adviser that it could be subject to regulatory scrutiny if the fund does not follow regulatory recommendations at the July AGM last year.
As a result, the fund stopped voting and later learned there was no basis for any probe, sources say.
The trade ministry also contacted several foreign shareholders ahead of the AGM, people familiar with the matter have said.
Toshiba conducted its own investigation into complaints about last year’s AGM and found that it was not involved in any attempt to put pressure on Harvard’s funds. That probe was criticized as perfunctory and inadequate by shareholders and surrogate advisors.
A second proposal from U.S. hedge fund Farallon Capital Management, Toshiba’s second-largest shareholder, which sought changes to the federation’s capital policy did not receive enough shareholder support to pass.
Reciting with Makiko Yamazaki; Edited by Edwina Gibbs