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TOKYO (Reuters) -Toshiba Corp’s second-largest investor called on Thursday for an extraordinary shareholder meeting for a vote to force the Japanese company to get two-thirds support before continuing with a controversial plan to split in three.
The proposal by Singapore-based hedge fund 3D Investment Partners marks the latest in a long and acrimonious battle between the once-mighty Japanese conglomerate and a number of its foreign shareholders, many of them activist funds.
In a statement, 3D highlighted concerns about the cost of Toshiba (OTC:TOSYY) going ahead with its split before getting a mandate from shareholders. It also called for Toshiba to continue with its strategic review.
“There is no rationale for pursuing at great expense the separation plan without knowing whether a sufficient number of Toshiba shareholders will ultimately provide consent,” the fund, which owns more than 7% of Toshiba, said.
With its proposal, 3D is effectively trying to force the conglomerate to bring forward by more than a year a legally mandated vote requiring backing from two-thirds of shareholders. Officially, the vote is not slated to be held until the annual shareholders meeting in 2023.
Since Toshiba is now nearly 30% owned by foreign funds, many of which are seen as taking a dim view of the split, 3D’s proposal could ultimately force the conglomerate to ditch its plan.
Toshiba said it has received the proposal from 3D and is currently examining it.
Weakened by a 2015 accounting scandal and the bankruptcy of its U.S. nuclear business, Toshiba has proposed the break-up – similar to a move by General Electric (NYSE:GE) Co – to sharpen focus on individual businesses.
But 3D and other shareholders have pushed for a more thorough review that would take into account potential private-equity bids.
Toshiba’s strategic review so far “failed to consider a full range of alternatives,” 3D said.
