Pedestrians walk past a logo of Toshiba Corp outside a electronics retailer in Tokyo.
TokYO Reuters -- Farallon Capital Management urged Toshiba Corp to secure the legal support of two-thirds of its shareholders before the Japanese industrial conglomerate continues with a controversial plan to split in three.
The second-largest investor 3 D Investment Partners, Toshiba's third-largest shareholder with a stake of more than 6%, joined Farallon, Toshiba's third-largest shareholder with a stake of more than 6%.
Since Toshiba is nearly 30% owned by foreign funds, many of which appear to oppose the split, setting the 66.6% bar could force the conglomerate to ditch its plan.
Farallon 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 in March to gauge shareholder support for the plan, which is due to be completed by March 2024. Details of the meeting aren't clear, including the level of shareholder support that will be required to continue with the plan.
With its demand, Farallon is forcing Toshiba to bring in a legally mandated vote by more than a year, which requires the backing of two-thirds of shareholders. The vote is not scheduled to be held until the shareholder's meeting in 2023.
The plan was announced last November after a five-month strategic review following years of accounting scandals and governance issues that undermined investor confidence and saw Toshiba's market value more than halve, from an early 2000s peak.