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Toshiba in turmoil

Toshiba CEO Kurumatani to resign Wednesday

Chairman Tsunakawa to replace embattled chief who clashed with activist shareholders

Toshiba CEO Nobuaki Kurumatani bows during a news conference in Tokyo in March 2018.   © Reuters

TOKYO -- Nobuaki Kurumatani will step down as CEO of Toshiba amid declining trust in his leadership both at the company and among investors, Nikkei learned Tuesday.

Kurumatani's successor will be Chairman Satoshi Tsunakawa, who preceded him as president and has maintained friendlier relationships with activist investors.

The embattled chief executive is expected to announce his decision Wednesday at a meeting of Toshiba's board.

The abrupt change in leadership comes about a week after Nikkei reported on a $20 billion proposal by private equity firm CVC Capital Partners to take the Japanese industrial group private.

A Toshiba spokesperson said the company has not announced any date or agenda for a board meeting. The company has already decided to set up a cross-department team to consider CVC's bid once a formal proposal is made.

Toshiba's nomination committee, which is made up of five outside directors, appears to have judged Kurumatani's position to be untenable after more than half of senior managers expressed a lack of confidence in his leadership in the latest survey conducted by the committee. The poll showed a steep drop in support compared with a year earlier.

Kurumatani previously chaired CVC's Japanese operations, raising concerns about the potential for conflicts of interest. He has clashed with shareholders over governance and accounting scandals at subsidiaries.

In an annual general meeting last year, a proposal to keep Kurumatani in his post was approved with just 57% support. The vote sparked controversy as top shareholder Effissimo Capital Management accused Toshiba of putting "undue pressure" on investors to vote in Kurumatani's favor or not at all.

Kurumatani was appointed as CEO in 2018, as the Japanese blue chip's first outside leader in more than half a century, to turn Toshiba around from a crisis stemming from deceptive accounting as well as massive losses at a U.S. nuclear subsidiary. He arrived the year after a 600 billion yen ($5.5 billion at current rates) capital increase that left the company with roughly 70% foreign ownership, setting the stage for its struggles with activist shareholders.

Under his leadership, the company shed assets and returned to the Tokyo Stock Exchange's first section this past January after being demoted to the market's second tier.

Tsunakawa joined Toshiba in 1979 and held positions including vice president before becoming president in 2016 in the wake of the revelation of yearslong accounting improprieties. He became chairman in 2020.

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