Toshiba was once synonymous with Japan’s industrial might. Of late it has become a byword for drama
Save time by listening to our audio articles as you multitaskThe latest plot twist comes amid talk of a buy-out led by Bain Capital, an American private-equity group. This raised hopes among investors for some sort of resolution to the saga. Toshiba’s market value has risen by a quarter in the past month.
The opening act in the Toshiba spectacle was tragic. The firm cooked its books to inflate profits by $1.2bn between 2007 and 2014. Implicated executives bowed deeply in apology. A new crop of leaders had to apologise again two years later when a big bet on Westinghouse, an American nuclear-power company, went sour. To remain solvent, Toshiba sold its prized memory-chip unit to a Bain-led consortium and issued a block of new shares. Foreign activist investors spied opportunity.
That set the stage for a protracted second act of tragicomedy. As shareholders pushed for better returns and more transparency, Toshiba executives squirmed. Some colluded with the Japanese government to stop the activists from getting seats on the board in 2020, according to an independent inquiry. A year ago a surprise bid to take the company private collapsed, bringing theKurumatani Nobuaki, down with it.
This plan, too, faltered, and on March 1st Mr Tsunakawa fell on his sword. At an extraordinary general meeting three weeks later, shareholders killed the management’s proposal for a split into two businesses, one focused on electronics, the other on infrastructure. At the same time, they also rebuffed calls from Toshiba’s second-largest investor for the group to court buy-out offers.
Hurdles remain. Japanese laws regulating foreign investment were amended in 2020 to increase oversight of industries important to national security. Toshiba has interests in several, including nuclear power, defence, chips and quantum computing. Regulators helped scuttle earlier buy-out bids. Bain appears to have learned from those experiences, and is said to be in discussions with Japanese funds and companies to form a consortium that would be palatable to the government.
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