Japan’s Toshiba chairman fails to win shareholder approval

Battered Japanese nuclear and electronics giant Toshiba Corp. faced off with shareholders Friday, seeking to shake off serious questions about governance at the once revered brand.

After a meeting lasting nearly three hours, Tokyo-based Toshiba failed to win shareholder approval for the reappointment of Chairman Osamu Nagayama and one other member of the board of directors. The other nine candidates were approved.

The company had removed two nominations in a last-minute attempt to placate disgruntled stockholders.

Nagayama had come under pressure to resign after an independent investigation that said Toshiba officials colluded with the Japanese government to curb foreign investors’ influence at last year’s shareholder meeting.

Major shareholders and investment fund Effissimo instigated that investigation, alleging that last year’s meeting, in which Effissimo had nominated dissident directors, wasn’t carried out fairly. They demanded Nagayama’s ouster at Friday’s meeting.

“He bears the greatest responsibility in nominating candidates and has ultimate responsibility for the conduct of the board,” Effissimo said in a report earlier this month.

Besides Effissimo, which owns about 10% of Toshiba shares, other foreign investors include 3D Investment Partners and Harvard University’s endowment fund.

The investigation included hearings with Toshiba employees, and going over 800,000 emails, to see whether the vote tally had been dubious and Trade Ministry bureaucrats had pressured investors on how to vote.