Investor revolt jolts Japan’s Toshiba Corporation

Tokyo: Toshiba Corp’s second-biggest shareholder on Sunday demanded the board chairman and three other directors resign immediately after an investigation found the company had colluded with the Japanese government to pressure foreign investors.

The letter, sent to the four on Sunday according to a person with direct knowledge of the process and seen by Reuters, is from 3D Investment Partners, which owns a 7.2% stake in Toshiba.

It is likely to the deepen a crisis sparked by last week’s report, which marked an explosive turn in a long battle between the Japanese company’s management and foreign shareholders.

These include activist investors and Harvard University’s endowment fund.

The revelations in the shareholder-commissioned report “are deeply troubling and represent one of the most prominent and shocking corporate governance failures among large public companies anywhere in the world in the last decade,” the 3D letter says.

The letter, addressed to board chair Osamu Nagayama and three current audit committee members, describes Nagayama as “ultimately responsible for Toshiba’s recent governance failures, including the flawed internal investigation and the board’s determination to oppose an outside, independent investigation.”