Toshiba's Unusual Rejection of Director Appointment at Annual Meeting Sparks Government Intervention Backlash

[Image source=AP Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] At Toshiba's regular shareholders' meeting in Japan, the reappointment proposals for outside director and board chairman Nagayama Osamu and audit committee member Kobayashi Nobuyuki were rejected.

According to Japanese media such as Kyodo News and NHK on the 25th, Toshiba's management reported the appointment of 11 directors at the shareholders' meeting held at 10 a.m. that day. Among them, the reappointment of two outside directors was rejected due to majority opposition, while the remaining nine were approved.

It is unusual for the company's proposed director appointments to be rejected at the shareholders' meeting.

Kyodo News reported that shareholders criticized the management regarding an external lawyer's investigation report containing allegations that the Ministry of Economy, Trade and Industry of Japan interfered with the voting rights of foreign shareholders at last year's Toshiba shareholders' meeting.

Earlier, a third-party committee composed of three external lawyers released an investigation report on the 10th, stating that the Ministry of Economy, Trade and Industry exerted undue pressure on some foreign shareholders at the request of management concerning the director appointment proposals at Toshiba's regular shareholders' meeting in July last year.

Last year, the director appointment proposals presented by the company were approved as originally planned, but this year, amid shareholder backlash, some of the proposals were rejected.

Shareholders held management accountable for the controversy over interference with shareholder voting rights, and Toshiba President Tsunakawa Satoshi promised, "We will strive to restore trust with shareholders and other stakeholders."

The Japanese government is known to have been covertly involved in Toshiba's management, which holds important technologies classified as security technologies, such as quantum cryptography and nuclear power.