– Toshiba’s CEO to Step Down After Losing Employee Support
Toshiba’s president Nobuaki Kurumatani has resigned, the firm announced Wednesday, as a buyout offer from a private equity fund reportedly stirs turmoil inside the Japanese company.
Toshiba Corp. said that Chief Executive Officer Nobuaki Kurumatani is stepping down and will be replaced by Chairman Satoshi Tsunakawa.
The changes are effective immediately.
The decision comes after Kurumatani suffered a sharp drop in support among the company’s executives and other employees. Employees who have confidence in the CEO fell to less than 60% in an internal January poll, down from more than 90% last year, Bloomberg News reported this week. More than 20% expressed a lack of confidence in his leadership, up from less than 5% previously.
The survey results prompted Toshiba to conduct detailed interviews with a narrower group of about 30 top executives and more than half of them expressed a lack of confidence in Kurumatani.
Toshiba is also under pressure from activists and targeted by potential acquirers. The company confirmed it had received a preliminary buyout offer from CVC Capital Partners. Separately, private equity firm KKR & Co. is exploring an offer for Toshiba, Bloomberg News reported.
The company’s shares rose 6.6% in Tokyo, taking its gains for the year to about 70%.
KKR is weighing a bid that would be likely to value Toshiba above the $21 billion buyout proposal that it’s already received from CVC Capital Partners, said one person familiar with the matter, who asked not to be identified as the details aren’t public. Canadian investment giant Brookfield Asset Management Inc. is also in the preliminary stages of exploring an offer for the company, including how such a bid might be structured, a separate person with knowledge of the matter said.
The deliberations are at an early stage, no final decisions have been made, and the discussions may not lead to firm offers, the people said.
– ‘Sticky situation’ –
CVC and Toshiba have close ties.
Kurumatani worked for the fund between 2017 and 2018, and a senior executive at CVC Japan currently serves as an outside director on Toshiba’s board.
That closeness has reportedly sparked concern, and Justin Tang, head of Asian research at United First Partners, said Kurumatani’s departure would “remove uncertainty over potential conflicts of interest”.
It will also “force the board to seek other offers that are in the best interests of shareholders”, he told AFP.