Toshiba is one of the leading companies of Tokyo, Japan has plans to divide into three separate divisions soon. The company is a household name in Japan and has been a symbol of technological prowess. The Japanese company said that the three companies they are planning to split into will be Infrastructure, devices, and semiconductor memory. Company also said that they are planning to take this step to improve shareholder value. But there has been pressure from activists due to mismanagement and scandals.
Chief Executive Officer of Toshiba Satoshi Tsunakawa said that for the last 140 years the company has evolved keeping in mind the new trends. Now it shall split into different divisions as each business need greater flexibility to face the challenges of its potential market. This move is relatively rare in Japan and it will be the first major company to divide into three independent listed companies. The company estimates the infrastructure business will have revenue of 2.09 trillion yen. While the devices company will have revenue of 870 billion yen in the fiscal year 2021.
Toshiba since the year 2015, has been surrounded by controversies too. The company had to pay the largest penalty of 6.3 billion dollars for falsifying financial statements. Later activists Effissimo Capital Management Pte started hindering the firm as losses raised. They wanted to get their co-founder Yoichiro Imai in the position of a director, which he was appointed too. But then the company repelled the activist after winning a clean sweep by board nominees. It was later investigated that the management had tapped government allies and worked with public officers to swing the vote in Toshiba’s favor.
That wasn’t the first time the Japan-based company joined hands with the government. A shareholder held an investigation and concluded that Japan’s trade ministry and Toshiba joined hands to block investors from gaining influence at last year’s shareholder’s meeting. Its overseas shareholders are having a rift, and have been in news for a while now.
