(Bloomberg) -- Toshiba Corp. won a clean sweep for its slate of board nominees, turning back a challenge from activist investors who sought more influence after years of accounting scandals and business missteps.
The Tokyo-based company said that its 12 proposed directors were all elected at a shareholders meeting. Activist Effissimo Capital Management Pte, the company's largest shareholder, had sought to have its co-founder, Yoichiro Imai, take a seat on the conglomerate's board. Toshiba's shares slid as much as 2% in Tokyo trading after the vote.
Toshiba, once renowned for its technological innovation, has stumbled badly in recent years. It paid a record fine in an accounting scandal and then lost billions on a bungled foray into nuclear power. To help cover the losses, Toshiba sold its medical unit to Canon Inc., its home appliance business to China's Midea Group Co. and a chunk of its crown-jewel memory chip business to a group led by Bain Capital.
Effissimo and other activist investors have clashed with the company, seeking improved governance and management changes. The Singapore firm, the first investor with an activist history to target Toshiba, disclosed a stake in 2017 and was later joined by other activists. On Friday, the firm said it remained open to “constructive engagement” with Toshiba management.
“There were many individuals that have shared our concerns and agreed that the further growth in Toshiba and enhancement to its corporate value could not be achieved absent a fundamental improvement in its compliance and corporate governance,” it said in a statement.
Effissimo this week reduced its stake to 9.91% from about 15.4% to remove concerns that its status as an overseas investor would impede Toshiba's independence. It also wanted to ensure Imai's status as an independent director if he had been elected to the board.
“This stems from our belief that there are internal control-related problems at Toshiba,” Effissimo said in a separate statement at the time.
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