Toshiba chief resigns amid restructuring at the Japanese electronics giant

New management still plans to split the company in two

Taro Shimada, who replaces Toshiba chief executive Satoshi Tsunakawa, attends an online press conference in Tokyo. AFP

Toshiba's chief executive Satoshi Tsunakawa resigned on Tuesday in the latest turbulent move at the Japanese firm, with his replacement pledging to move forward with a plan to split the company in two despite opposition from some investors.

Mr Tsunakawa will be replaced on an interim basis by senior executive Taro Shimada. The former chief executive will remain as chairman of the board of the directors.

Speaking in Tokyo, Mr Shimada pledged to strengthen ties with shareholders, workers and other stakeholders.

But he put his support behind the plan to divide Toshiba into two companies, despite earlier reports that the new management could review the controversial proposal.

Activist investors have called for the company to review other options, including a potential sale to private equity. Management has been reluctant to pursue that path, with Mr Tsunakawa saying in an interview that going private was full of risks that would be “impossible” to ignore.

Mr Shimada said the company is not considering cancelling the plan to split or going private.

Last month, Toshiba scrapped its proposal to divide into three listed companies and switched to a plan to split into two instead.

The company will hold a shareholder meeting on March 24 to gauge investor support for its revised plan.

“Some shareholders voiced concerns that it’s difficult to vote on the two-way split plan without knowing who will be the leader taking the initiative,” Mr Tsunakawa said at the briefing. “Today’s announcement is a result of the appointment committee moving swiftly to address that point.”

Satoshi Tsunakawa stepped down from the role on March 1. Reuters

Toshiba's shares closed 2.4 per cent higher in Tokyo, having pared earlier gains.

Investors have been cool on both proposals to split, with shares still trading below the level they were at before the first split proposal was unveiled last year. The Japanese company’s second-largest shareholder, 3D Investment Partners, has called on Toshiba to reopen negotiations with private equity firms.

Nikkei BP reported last week that Toshiba had received an early takeover offer from Blackstone, which was denied by both sides.

In the interview with Bloomberg Television, Mr Tsunakawa voiced opposition to going private, saying that Toshiba would lose orders from utilities and local governments and would be forced to sell sensitive technology in areas such as nuclear, defence and cyber security.

Mr Shimada, 55, was hired from Siemens to lead Toshiba’s digital strategy in 2018. He was personally approached to join the company by Mr Tsunakawa’s predecessor, Nobuaki Kurumatani, who had formerly worked at private equity firm CVC Capital Partners.

Updated: March 01, 2022, 1:55 PM
EDITOR'S PICKS