Pedestrians walk past a logo of Toshiba Corp outside a electronics retailer in Tokyo September 14, 2015. TOKYO, Jan 18, Reuters -- Farallon Capital Management urged Toshiba Corp 6502 Before the Japanese industrial conglomerate continues with a controversial plan to split in three, it needs to secure the legally required support of two-thirds of its shareholders.
The second-largest investor 3 D Investment Partners, Toshiba's third-largest shareholder with a stake of more than 6%, joined the US hedge fund Farallon, which has a stake of more than 6%. The 67% bar could force the conglomerate to ditch its plan because Toshiba is nearly 30% owned by foreign funds, many of which seem to oppose the split.
Farallon said that Toshiba should get approval from two-thirds of its shareholders before it risks expending significant time, cost and management resources on the separation plan.
It said that the separation plan without shareholder trust would result in nothing but the creation of three discrete companies, with each inheriting the same issues as Toshiba.
In March, Toshiba is preparing to hold an extraordinary shareholder meeting EGM to gauge shareholder support for the plan, which is due to be completed by March 2024. Details of the meeting have not been decided yet, including shareholder support that will be required to continue with the plan.
The company said in a statement to the Reuters that it would announce the EGM date and agenda when it decides on the convocation.
With its demand, Farallon is forcing Toshiba to bring forward a legally mandated vote by more than a year, which requires the backing of two-thirds of shareholders. The vote isn't scheduled to take place until the annual shareholders' meeting in 2023.
The break-up plan was announced last November after a five-month strategic review after years of accounting scandals and governance issues that undermined investor confidence and saw Toshiba's market value go up more than halve, from an early 2000s peak.