TOKYO -- Toshiba will streamline its executive structure next month as part of an overhaul aimed at getting the company back on its feet and regaining investor trust, an effort that faces a test Tuesday at an extraordinary shareholders meeting.
The reorganization announced Monday reduces the number of executive officers from 23 to 15 as of Nov. 1. Toshiba said the move reflects changes to its business structure following spinoffs of major businesses.
The remaining executives will take on the duties of departing officers as needed. "Executive officers responsible for oversight of corporate matters and the group as a whole will gain wider and higher perspectives and be able to execute management with greater speed," Toshiba said.
The announcement precedes an extraordinary shareholders meeting -- Toshiba's third since a 2015 accounting scandal -- at which investors will be asked to vote on 10 director candidates.
Shareholders also will be asked to approve earnings for the fiscal year ended in March, which finally were released in August, a month after the original deadline. The delay owed to a disagreement between Toshiba and auditing firm PricewaterhouseCoopers Aarata over the timing of massive losses on U.S. nuclear operations that came to light late last year.
Of particular interest to investors is a third proposal: an agreement to sell Toshiba's flash memory unit to an American-Japanese-South Korean consortium.
The nuclear losses left the Japanese conglomerate with shareholders' equity of negative 552.9 billion yen ($4.86 billion at current rates) at the end of fiscal 2016. Should the company fail to erase that deficit before the end of this fiscal year, it will risk delisting from the Tokyo Stock Exchange. Proceeds from selling Toshiba Memory will be crucial for returning net worth to positive territory.
The proposal is expected to win the two-thirds majority needed to pass, though the margin may be slimmer than Toshiba hopes due to the efforts of chipmaking facilities partner Western Digital. The American hard-drive maker, which asserts that transferring the memory operations without its consent would violate joint venture agreements, is leaning on Toshiba shareholders to vote against the sale.
The deal still faces other risks. Antitrust screening in the relevant countries could prove time consuming, given the participation of South Korean chipmaker SK Hynix in the buying consortium, and Western Digital has sought arbitration to block the sale. A senior Toshiba official put the odds of completing the deal before fiscal year-end at 50-50.
Investors likely will seek a full explanation of Toshiba's plans for maintaining its stock market listing, including alternatives to the memory sale should the deal fall through.