Toshiba's 'Company Split Plan' Ultimately Rejected... Will It Choose Delisting?

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Toshiba's plan to split the company into two divisions was ultimately rejected on the 24th. Although the reform plan was proposed amid severe management difficulties caused by accounting fraud and government collusion scandals, it was scrapped due to shareholder opposition.

According to NHK and other broadcasters, Toshiba held an extraordinary shareholders' meeting that morning and proposed splitting the company into two divisions: the semiconductor device business and the infrastructure services business. However, the plan failed to gain majority support and was rejected. President Taro Shimada announced this and said, "We will consider all options to enhance corporate value."

Last November, Toshiba announced a plan to split the company into three divisions to increase corporate value. However, due to cost issues and various controversies, shareholders opposed the plan, leading to a revision of the strategy to separate only the device business from the headquarters. Toshiba emphasized that this would enable faster decision-making and increase corporate value to persuade shareholders, but the attempt failed.

During the extraordinary shareholders' meeting, shareholders raised questions such as whether delisting would be appropriate and about the current morale of employees, reported the Nihon Keizai Shimbun describing the atmosphere. President Shimada said, "Personally, I have many thoughts, but it is not appropriate to discuss them here," adding, "We will discuss within the company and respond appropriately."

With the split plan rejected, attention is focused on Toshiba's future decisions. The market is particularly watching the possibility of Toshiba's delisting. Last year, the UK-based private equity firm CVC Capital Partners proposed acquiring 100% of Toshiba's shares to take the company private. Other private equity firms also engaged in sale discussions, but none were successful.