TOKYO (BLOOMBERG) - Toshiba chief executive officer Satoshi Tsunakawa resigned from his post on Tuesday (March 1) in the latest turbulent move at the Japanese firm which could lead to yet another review of its plans to split.
He will be replaced on an interim basis by senior executive Taro Shimada, with the board of directors pledging to monitor his performance, and suggesting it could appoint an external candidate instead. Mr Tsunakawa will remain for now as chair of the board of the directors.
While Toshiba reiterated that the board still views the plan into two companies as its best option, earlier media reports indicated the new management could review the controversial proposal, which Mr Tsunakawa has vociferously supported.
Toshiba last month scrapped its plan to divide into three listed companies and switched to a proposal to split into two instead. While Toshiba did not give a reason for today’s management change, Mr Tsunakawa resigned to take responsibility for the chaos caused by the abrupt alteration of its reorganization plans, TV Tokyo reported.
Activist investors have called for the company to review other options, including a potential sale to private equity. But management have been reluctant to pursue that option, with Mr Tsunakawa saying in an interview last week that going private was full of risks that would be “impossible” to ignore.
Toshiba shares rose as much as 5 per cent on Tuesday, the biggest intraday gain since April.
“The stock move shows Toshiba’s stakeholders don’t like the idea of splitting the company, whether it’s two or three,” Ace Research Institute Hideki Yasuda said. “The market is pricing in that the chance of Toshiba going private has increased.”
Investors have been cool on both proposals to split, with shares still trading below the level before the first split proposal was unveiled last year. 3D Investment Partners, the Japanese company’s second-largest shareholder, has called on the company to reopen negotiations with private equity firms which some see as the key to unlocking its value.
Nikkei BP reported last week that the firm received an early takeover offer from Blackstone, which was strenuously denied by both sides.
Mr Tsunakawa had voiced public opposition to a privatisation. In the interview with Bloomberg Television, he said that Toshiba would lose orders from utilities and local governments if it went private, and would be forced to sell sensitive technology in areas such as nuclear, defense and cybersecurity.
Senior executive Mamoru Hatazawa will also step down along with Mr Tsunakawa.
oshiba plans to hold a shareholder meeting for March 24 to gauge investor support for its revised plan to separate into two entities.
Mr Shimada, 55, was hired from Siemens to lead Toshiba’s digital strategy in 2018. He was personally approached to join the company by Tsunakawa’s predecessor, Nobuaki Kurumatani, who had formerly worked at private equity firm CVC Capital Partners.
