Toshiba drama winds down as shareholders approve sale of chip-making business
THIS PAST TUESDAY proved to be a pivotal day for Japanese tech veteran Toshiba Corp., with investors finally approving the sale of the company’s lucrative chip-making business.
Apart from gaining the investors’ all-important and elusive approval, Toshiba was also able to vote in 10 directors, including President Satoshi Tsunakawa. Just like the past few months, however, Tuesday’s vote ended up filled with drama.
The company’s shareholder meeting saw investors vote in Tsunakawa as the president of the beleaguered tech firm, a move that has long been opposed by Glass Lewis & Co. and Institutional Shareholder Services Inc.
During the shareholder meeting, Glass Lewis expressed its disapproval of nine out of the ten recently elected directors. Though still notably skeptical, ISS was a bit more forgiving than Glass Lewis, voicing its opposition against five of the elected directors, according to a Bloomberg report.
Earlier this month, Glass Lewis and ISS aired their reservations about Tsunakawa’s leadership qualities, especially his past decisions which ultimately cost the company significant losses.
ISS, for one, took particular issue with Tsunakawa’s inability to establish adequate internal controls.
Glass Lewis further pointed out the irregularities in Toshiba’s medical unit, many of which happened under the leadership of Tsunakawa.
Despite the opposition, however, the fact remains that Toshiba was able to take a valuable step forward this past Tuesday. If any, it has managed to inch closer to its goal of fully selling its valuable chip-making business by its self-imposed March 2018 deadline.
With regards to his election, Toshiba Corp. President Satoshi Tsunakawa expressed his gratitude for the company’s investors. The controversial executive also owned up to his past mistakes, apologizing for the trouble he has caused so far.
“I once again apologize from the bottom of my heart for causing our stakeholders so much trouble and concern. We will not be able to grow without our shareholders’ trust. We ask for your understanding and support,” Tsunakawa said, according to a Japan Times report.
Toshiba has been attempting to sell its lucrative chip-making unit for a while now. Despite ample interest from massive tech firms across the globe, however, Toshiba’s efforts faced stern opposition from Western Digital, a US-based firm which has an active joint venture with the Japanese veteran tech giant.
According to Tsunakawa, however, Toshiba is already looking beyond what could happen to the company if its memory business could not be sold.
“What happens if we cannot sell Toshiba Memory is a hypothetical question, but we will need to consider various measures depending on environmental changes. We will continue to focus on selling the unit, avoid delisting and improve our financial standings,” Tsunakawa said, according to the Times.
With the breakthrough it achieved this Tuesday, however, meeting the company’s March deadline suddenly seems like a fairly realistic scenario.
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- Bidders line up to acquire Toshiba’s chip business as second-round bids close
- Toshiba-Western Digital spat prompts Japanese government to intervene