Toshiba Corp (6502.T) and Japan’s government colluded to lean on foreign investors to back company management in a key vote, according to an investigation which alleged one executive said they would ask the trade ministry to “beat up” a hedge fund.
The shareholder-commissioned report released on Thursday also said that Yoshihide Suga – then chief cabinet secretary and now prime minister – verbally encouraged the pressure on investors during a meeting with a senior Toshiba executive last year, an allegation Suga has denied.
Toshiba is of strategic importance to Tokyo as a maker of nuclear reactors and defence equipment. The probe’s findings mark an explosive turn in a long battle between the Japanese company’s management and foreign shareholders, which include activist investors and Harvard University’s endowment fund.
The report, written by independent investigators, says Toshiba’s management reached out to the Ministry of Economy, Trade and Industry (METI) for support ahead of its annual general meeting last July, to counter activist investors.
The management “worked closely” with the ministry to exert “undue influence on some shareholders” including an attempt to force Effissimo Capital Management to withdraw its candidate nominations, according to the probe.