Activist fund Effissimo Capital Management, the biggest investor in Toshiba Corp., was kept in limbo by the government over a key shareholder vote until the day before the industrial conglomerate's annual meeting, two government sources said.

The delayed approval to hold the vote on appointing outside directors to Toshiba's board illustrates how Japan's tighter rules on foreign ownership, introduced in June and designed to protect industries critical to national security, may also potentially be used to keep activist shareholders in check.

Some investors have said the changes could deter foreign capital from coming to Japan.