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TOKYO : Toshiba Replaces CEO Again but Sticks With Two-Way-Split Plan

BY MEGUMI FUJIKAWA | UPDATED 3月 01, 2022 03:49 午前 EST

Former Siemens executive takes over at Japanese industrial conglomerate

Toshiba Corp.’s chief executive stepped down Tuesday, but the company said it would stick with its plan to split into two parts, which some foreign shareholders oppose.

Satoshi Tsunakawa, a longtime Toshiba executive who had two stints as CEO, was replaced in the job by Taro Shimada, 55, who joined Toshiba in 2018 after working at a Japanese unit of Germany-based Siemens AG.

The two-way split announced in February calls for Toshiba to spin off its device business and for its remaining unit to focus on energy and infrastructure. The change is targeted to take place by March 2024 but has yet to win approval from shareholders.

The management shake-up is intended to lay the groundwork for the split. Toshiba said Mr. Shimada would lead the energy and infrastructure company after the spinoff, while another newly promoted executive, Hiroyuki Sato, would head the device company.

The split plan has faced opposition from foreign-based shareholders, who also objected to an earlier plan to divide Toshiba into three. One major shareholder, Singapore-based 3D Investment Partners Pte., has asked Toshiba’s strategic-review committee to consider alternatives, including selling the whole company to a private investor.

Mr. Shimada reiterated Tuesday that Toshiba doesn’t currently envision selling itself to a private investor who would end the company’s stock-market listing.

“We are going to go ahead with the separation plan as scheduled. To make that happen, we need to build a strong relationship of trust with our stakeholders as quickly as we can," he said at a news conference.

G. Raymond Zage III, the head of Toshiba’s nomination committee, said the management shake-up was a response to shareholders who expressed concerns about the prospects for restructuring.

The company plans to hold a special shareholders meeting March 24 and conduct a nonbinding vote seeking support for the plan.

Toshiba said Tuesday’s appointments were interim. It said the board would monitor the performance of the new executives and continue to consider external candidates for top posts. Mr. Tsunakawa, the departing CEO, will continue to serve as chairman of the board.

Tensions between the company and shareholders grew after a report released in June 2021 found evidence of broad collaboration between the company and government officials to stifle foreign shareholders’ voices ahead of an annual shareholder meeting in July 2020. One executive wrote an email saying that the group’s way of dealing with those shareholders was to “beat them up," according to the report.

Tuesday’s appointment makes the fifth time since 2015 that Toshiba has changed its CEO.

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