Business & Economy

Toshiba CEO resigns weeks after announcing new restructuring

Tokyo, March 1 (EFE).- Satoshi Tsunakawa, executive director of technology company Toshiba, resigned Tuesday from his position as head of the Japanese company amid plans for its split into two entities, the company announced in a statement.

The Japanese conglomerate, which has been going through financial problems for years and is immersed in a restructuring process, will be headed by Taro Shimada, current senior vice president of the corporation.

Another vice president of the company, Mamoru Hatazawa, will also leave his post, in which he will be replaced by Goro Yanase, who was running one of the branches of the conglomerate, whose board of directors approved the new appointments Tuesday.

Toshiba’s CEO said in February he would “separate Toshiba into two independent companies and divest certain secondary assets” as “the best thing” for the company in the long term.

The reason for the leadership change is the open battle between the board and the activist investors around the plans to split the Japanese conglomerate into several entities to clean up its finances and promote more profitable businesses.

The announcement comes weeks after the proposal by Toshiba’s board of directors to separate into two entities instead of three – as it had initially proposed – with a view to “streamlining its management” and trying to please its shareholders.

The fragmentation of the company was forged in November of last year, to solve the problems that it had dragged on for years and that had penalized its stock market performance.

In June, shareholders fired the chairman of the board of directors and another top executive, following the departure of two other directors in the scandal of collusion of the company’s leadership against activist foreign investors.

Foreign investors control about half of Toshiba’s shares and pressured management to reshape the conglomerate’s structure and improve the efficiency of its business model, which led last year to announce its division into three, and in early February in two.

The Japanese company, with almost 150 years of history, will hold an extraordinary shareholders’ meeting on Mar. 24 to vote on its restructuring plans. EFE


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