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Toshiba CEO Satoshi Tsunakawa quits amidst reorganization turmoil

Date: March 03, 2022 Sunil Jha Sunil Jha
Toshiba CEO Satoshi Tsunakawa quits amidst reorganization turmoil 
Japanese conglomerate, Toshiba Corporation, has reportedly announced that its CEO, Satoshi Tsunakawa, has stepped down from his role, a surprise exit that comes after sources had said earlier that the company’s restructuring plans were facing internal opposition.



As per reports, Taro Shimada, who has been appointed as the new interim CEO, has however stated that the company will continue pursuing its board-approved break-up plan.



Foreign hedge fund shareholders had criticized the conglomerate’s initial plans of splitting into three last year, with many favoring selling to a private equity firm instead. A revised plan called for splitting into two companies instead and selling other businesses, but sources said that it also saw internal disagreement.



Sources also claim that there were fears within the company that if the sale of divisions, such as Toshiba’s elevator business, goes according to the revised plans, the Tokyo-based company will be left with only low-margin businesses.



Regarding internal opposition, the company said it firmly believes that the announced restructuring plan is its best option.



Some are now doubting whether Toshiba will be able to go ahead with its break-up plans following the departure of Tsunakawa and board member Mamoru Hatazawa, who had pushed for the split.



Ex Siemens AG senior executive Shimada’s appointment, who had just joined in 2018, signifies a major change of guards at Toshiba, with the company’s share ending 2% higher as well.



Goro Yanase, Head of Toshiba’s elevator business, will be appointed as the interim chief operating officer.



In a statement, the Toshiba board stated that it will be monitoring the new appointees’ performance as well as the status of business executives, while continuing its deliberations of appointing external candidates where required.



A general meeting to seek initial approval of shareholders for the revised reorganization plan has been set for 24th March, where shareholders will also be voting on a major shareholder’s proposal for the conglomerate to explore other options as well as solicit purchase offers from private equity companies.



The break-up plan had already been announced in November last year, following a five-month strategic review of previous governance issues and accounting scandals that had weakened investor confidence, with Toshiba’s market value falling to half of its early 2000s peak.



Source credit: https://www.reuters.com/business/surprise-move-toshiba-ceo-resigns-amid-opposition-restructuring-plans-2022-03-01/

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Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for newsorigins.com, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.