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| Toshiba plans to split into three companies |
Japanese giant Toshiba plans to split its two main companies - energy and infrastructure, and hardware and storage - into three separate companies.
After the two companies split, Toshiba continued to hold a 40.6% stake in assets such as memory chip maker Kioxia.
The plan returns to a five-month strategic review in the wake of the corporate governance scandal and aims, among other things, to oust radical shareholders.
The decision may conflict with the demands of some shareholders to convert Toshiba into a private company. However, the Strategic Audit Committee said the choice raised internal concerns about operational implications and employee retention.
He added that private equity firms also raised concerns about completing the deal due to potential conflicts with Japan's national security law and potential opposition from antitrust authorities.
CEO Satoshi Tsunakawa said Toshiba opted for the spin-off regardless of the presence of active shareholders, and Japan's powerful Commerce Ministry has not spoken out against the plan.
"This move will allow any company to significantly increase its focus and encourage more flexible decision-making and lower cost structures," the company said in a statement.
Toshiba's announcement came days after General Electric announced a similar spin-off plan that marked the end of another pioneering conglomerate with more than 100 years of history.
Decline the invitation to become a private company
Toshiba expects to complete the restructuring in the second half of fiscal year 2023. Its goal is to return about 100 billion yen ($875 million) to shareholders over the next two fiscal years.
It also announced its intention to liquidate its stake in Kioxia. and return all net proceeds to shareholders as soon as possible. But she didn't say if that meant she still wanted to advertise herself or if she was considering other options.
Another asset that Toshiba continues to acquire is its stake in Toshiba Tec, a manufacturer of retail and print information systems.
Since the accounting scandal in 2015, the 146-year-old group of companies has gone from one crisis to the next. Two years later, it received a cash injection of $5.4 billion from more than 30 foreign investors.
Since then, tensions between Toshiba's management and foreign shareholders have made headlines.
An investigation commissioned by shareholders in June found that the group was consulting with Japan's Ministry of Commerce. This is to prevent investors from receiving a bargaining chip at last year's shareholder meeting.
The company prepared a separately authorized report and found that the executives were behaving unethically. But it is not illegal.
The report concluded that the group relied excessively on the Ministry of Commerce. He added that these issues are also due to the keen interest with external mutual funds and the development of healthy relations with them.