Toshiba to Delisted from Tokyo Stock Exchange on December 20

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Japanese conglomerate Toshiba Corp (6502.T), whose troubles began with a profit-padding scandal in 2015 and continued with huge losses at its U.S nuclear subsidiary, will be delisted from the Tokyo Stock Exchange on Dec 20 as the company looks to restructure and regain investor confidence. The firm said on Thursday that it will hold an extraordinary shareholder’s meeting on Nov 22 to approve the consolidation of its shares, which will pave the way for it to be taken private in a 2 trillion yen ($13.4 billion) tender offer from private equity firm Japan Industrial Partners.

The move comes after a series of tumultuous events that have engulfed the company, which had long symbolized Japan’s economic might. The company has struggled to rebuild itself after admitting in 2015 that it had altered its books for seven years, faking profits totaling hundreds of billions of yen. The scandal prompted a multibillion-dollar fine, a loss of the prized memory chip business, and a slew of resignations among top management.

Despite its problems, Toshiba has managed to reclaim some investors’ trust, partly thanks to the success of the JIP bid. It also increased its efforts to improve internal control following the financial scandal. However, the company has still struggled to meet critical deadlines for financial filings and is subjected to regular scrutiny by the TSE.

In a statement, the board of Toshiba’s parent company METI, which holds about half of the firm’s shares, called on the company to improve its governance and relations with shareholders. The statement said that METI “believes that a stable shareholder base is essential for Toshiba to pursue its business strategy centered on high-margin digital services.” It also urged the firm to set a schedule for releasing earnings results and complete the date by as much as possible in the future.

At a tumultuous June shareholders’ meeting, the board voted down a proposal to reappoint an external director who had overlooked METI’s relationship with the Toshiba board, further exacerbating tensions between the company and some of its significant shareholders. The company has tried to regain the trust of those investors by pledging to improve its communications with them.

In the letter to shareholders, JIP defended its decision not to give potential financial investors a formal due diligence process for minority investments. The company argued that doing so would have predetermined the outcome of its strategic review and could have hindered the thoroughness and speediness of the review. It also emphasized that it was in discussions with multiple financial investors and would continue to do so. JIP said it plans to retain CEO Shimada, who has led the company through a turbulent time. The company is expected to issue a detailed explanation of its plan to shareholders in a later statement. The EGM will be held at the Belle Salle Takadanobaba in Tokyo, starting at 10 a.m. local time on Nov 22.


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