Toshiba finds no evidence of pressuring Harvard over AGM vote

Largest shareholder Effissimo wants independent probe

Toshiba has found no evidence it was involved in trying to influence the Harvard University endowment fund over voting at its AGM, following an internal investigation.

However, the firm also said that it would not be launching a third-party committee, which had been demanded by its biggest shareholder Effissimo Capital Management, to investigate if its July AGM was conducted fairly.

According to Reuters, Hiro Mizuno, former chief investment officer of the Government Pension Investment Fund and a board member of Tesla, told Harvard that a vote against Toshiba’s management at the AGM could be subject to regulatory probe.

The Harvard endowment fund abstained from a vote on the reappointment of Nobuaki Kurumatani, which proved to be a crucial boost for the Toshiba chief executive.

When contacted by Toshiba’s audit committee, Harvard did not provide any specific information on whether Toshiba had applied any undue pressure.

The audit committee also interviewed Toshiba’s CEO and other top executives, and screened 30,000 emails, but found no evidence of communication between Mizuno and Harvard.

Toshiba will hold an extraordinary meeting on 18 March to vote on separate proposals from its largest shareholder Effissimo, and US hedge fund Farallon Capital Management.

Effissimo wants an independent probe into the AGM while Farallon is demanding a vote on Toshiba’s investment strategy.

Toshiba said it opposed both proposals and advised shareholders to vote against them.

The problems are another setback for Toshiba after it tried to improve its corporate governance following a $1.2bn accountancy scandal in 2015 as these revelations have raised concerns about its tactics to try and nullify shareholder activists.

The Japanese government has also made a huge effort to overhaul corporate governance regulations in recent years, but issues are still surfacing, with Toshiba the latest company to come under scrutiny.

Former Prime Minister Shinzo Abe introduced a number of reforms as part of his “Abenomics” growth strategy, including Japan’s stewardship code in 2014 and the corporate governance code in 2015.

The government amended the law requiring large companies to appoint at least one outside director, and a revised corporate governance code is due this spring.