Proxy adviser ISS backs activist shareholder’s proposal for Toshiba probe – Sources

Proxy adviser Institutional Shareholder Services Inc (ISS) on Wednesday recommended that Toshiba Corp shareholders vote for Effissimo Capital Management’s proposal for an independent probe into the Japanese industrial conglomerate.

Toshiba has been embroiled in a row with Singapore-based Effissimo Capital Management, which is calling for a third-party probe into the firm’s annual general meeting (AGM) last year, arguing that the voting rights of several shareholders were compromised.

ISS said in a report seen by Reuters that Toshiba’s internal investigation into the issue was “one-sided.”

“It will be difficult to escape the impression that Toshiba conducted a perfunctory investigation in response to the allegations by Effissimo,” the report said.

Top Toshiba shareholder renews call for probe over pressure on AGM vote

(Reuters) – Toshiba Corp’s top investor has renewed its call for an independent investigation into the company’s annual shareholder meeting (AGM) last year, according to a letter dated Wednesday sent to other shareholders.

Singapore-based Effissimo Capital Management’s letter, seen by Reuters, follows the Japanese conglomerate’s conclusion last week that it was not involved in any effort to pressure the Harvard University endowment fund over its vote at the AGM.

Effissimo said the internal review was “limited in scope”, and is calling for an extraordinary shareholder meeting to establish a team of legal experts to investigate, saying the voting rights of some shareholders were compromised.

“Our objective is not to re-litigate the results of the 2020 AGM but to seek reassurance that there has not been an assault on the integrity of shareholder voting,” the letter said.

Reuters previously reported that Hiromichi Mizuno, a Japanese government adviser at the time, had told the Harvard fund that its vote at Toshiba’s AGM could be subject to a regulatory probe should it vote against the firm’s management.

“Even if the third party acted in isolation, does the Board not have any responsibility to protect its shareholders’ rights?” the letter said.

“Failure to perform a thorough and independent investigation will set a harmful precedent not only for Toshiba but corporate Japan as a whole,” it said.

Toshiba will hold an extraordinary meeting on March 18 to vote on separate proposals from two large shareholders – Effissimo, which wants the independent probe, and U.S. hedge fund Farallon Capital Management, which wants a vote on the company’s investment strategy.