Toshiba shareholder calls for special meeting to vote on break-up plan

TOKYO, Jan.6 (Reuters) – Toshiba Corp’s second-largest investor (6502.T) on Thursday called an extraordinary general meeting of shareholders for a vote to force the Japanese company to gain two-thirds support before pursuing a controversial project split into Three.

Singapore-based hedge fund 3D Investment Partners’ proposal marks the latest in a long and fierce battle between the once powerful Japanese conglomerate and a number of its foreign shareholders, many of whom are activist funds.

In a statement, 3D highlighted concerns about the cost of Toshiba to continue its spin-off before securing a mandate from the shareholders. He also called on Toshiba to continue its strategic review.

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“There is no reason to pursue the separation plan at great expense without knowing whether a sufficient number of Toshiba shareholders will ultimately consent,” said the fund, which owns more than 7% of Toshiba.

With its proposal, 3D is indeed trying to force the conglomerate to advance by more than a year a legally mandated vote requiring the support of two-thirds of the shareholders. Officially, the vote is not expected to take place before the annual meeting of shareholders in 2023.

Given that Toshiba is now nearly 30% owned by foreign funds, many of which are seen to take a negative view of the split, 3D’s proposal could ultimately force the conglomerate to abandon its plan.

Toshiba has stated that it has received the proposal from 3D and is currently reviewing it.

Weakened by an accounting scandal in 2015 and the bankruptcy of its US nuclear business, Toshiba proposed the split – similar to a move by General Electric Co – to focus more on individual companies.

But 3D and other shareholders have pushed for a more in-depth review that would take into account potential private equity offers.

Toshiba’s strategic review so far “has not considered a full range of alternatives,” 3D said.

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Reporting by Makiko Yamazaki; Editing by David Dolan and Muralikumar Anantharaman

Our Standards: Thomson Reuters Trust Principles.

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