The head of the parent of the Tokyo bourse operator has urged Toshiba Corp. to swiftly disclose the outcome of its investigation into governance issues, following an independent probe showing the industrial conglomerate colluded with the government to block foreign activist investors.
“We ask Toshiba to conduct a prompt reinvestigation and disclose its findings in a timely manner,” Akira Kiyota, CEO of Japan Exchange Group Inc., said at a news conference Wednesday, calling on the Japanese conglomerate listed on the Tokyo Stock Exchange to restore the trust of investors and other stakeholders.
A probe by lawyers revealed last week that Toshiba sought the industry ministry’s help in blocking proposals by foreign activist investors and concluded that a shareholders meeting held last year was not conducted fairly.
According to Kiyota, JPX, the parent of Tokyo Stock Exchange Inc., will be paying close attention to Toshiba’s shareholders meeting next Friday.
Kiyota added he was concerned that the issue may damage the reputation of the Japanese market among foreign investors, who account for about 70% of the trading value of the first section of the Tokyo stock market.
Toshiba admitted Monday that the company lacked awareness regarding governance and compliance, and will look into the root cause with the participation of third parties. The Ministry of Economy, Trade and Industry subsequently said it was not planning a probe.
The revelations of collusion between Toshiba and the ministry have raised doubts anew about corporate governance. The Japanese household name has vowed to improve governance since an accounting scandal in 2015.
The probe by a group of independent lawyers conducted at the request of foreign investors came after the audit committee concluded earlier this year that there was no problem with the July 2020 shareholders meeting.
Toshiba just returned to the first section in January, more than three years after its demotion to the second section following massive losses at its bankrupt U.S. nuclear unit.
Kiyota defended the move by JPX to approve Toshiba’s promotion as being appropriate at the time, given improvements in tackling issues including the accounting scandal.
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