Four Toshiba External Directors Call for Management Shake-Up

Members of Toshiba Corp.’s board of directors called a report into the company’s handling of the 2020 shareholders’ meeting “deeply disturbing,” and said change was needed in both the board and management, in a unusual rebuke.

Four external board members of the Japanese conglomerate -- George Raymond Zage III, Ayako Hirota Weissman, Paul J. Brough and Jerry Black -- said the report published on Thursday showed that changes were needed “at both the board and management level” of Toshiba, according to an emailed statement signed by the four.

The report, overseen by three lawyers, said Toshiba worked in unison with Japan’s powerful Trade Ministry to influence the shareholder vote that installed its slate of directors, and rejected those proposed by activist investor Effissimo Capital Management, Toshiba’s largest shareholder.

The 2020 vote was approved by the slimmest of margins, but Effissimo subsequently passed a proposal to investigate the results amid suspicion over fairness in the voting.

The four directors said that the report showed “certain members of the management and board took actions that were unacceptable and directly against the interests” of Toshiba shareholders. They also said they no longer supported the slate of candidates for the board proposed by management, set to be voted on by shareholders at the June 25 meeting.

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