Effissimo Capital Management (“Effissimo”) has updated its March 1 Presentation to highlight the factual errors in Toshiba Corporation’s (“Toshiba” or the “Company”) March 4 response. The updated presentation can be found here https://2021egm.com/egmdeck.pdf and our response can be found on pages 78 through 96.
Effissimo’s presentation highlights misstatements of fact contained in Toshiba’s Convocation Notice of the Extraordinary General Meeting of Shareholders dated February 26. Effissimo has asked the Company to correct their response, which is also contained in the Convocation Notice, without response as of today. The summary of factual misstatements by Toshiba is on page 47 of Effissimo’s updated presentation.
Toshiba has failed to provide convincing answers to basic questions regarding the irregularities that have emerged since the 2020 AGM. Effissimo believes the reason for Toshiba’s lack of response is not that the facts are hard to find, but the lack of motivation to uncover them on the part of the Audit Committee.
Toshiba continues to not understand that its Audit Committee is conflicted in this matter. Candidates in an election should not be appointed to investigate the very process by which they were elected, especially if there are irregularities that may have helped secure their election. It is highly relevant that the chair of the Audit Committee was opposed by more than 40 percent of shareholders voting.
Toshiba’s repeated objection that the proposed investigation by three independent investigators will be too costly and distracting is hard to credit in light of the resources it has likely spent on investment banks, law firms, and proxy solicitors at shareholder expense.
Toshiba’s updated March 4 presentation inadvertently admits possible additional irregularities in the conduct of the 2020 AGM. Toshiba states that “Toshiba in fact urged certain shareholders to vote through a voting facilitation vendor as they hadn’t confirmed their votes1” in response to Effissimo’s finding that one management-friendly shareholder had voted online 21 minutes before the vote deadline. Toshiba admits, but does not seem to be sensitive to the impropriety of, having its proxy solicitor selectively encourage and facilitate voting by presumably pro-management shareholders. Is it not the Board’s duty to treat all shareholders equally?
Given its poor governance and compliance track record, Toshiba should be taking all possible efforts to reassure its shareholders that their right to vote is secure. Effissimo invites the Company to publicly endorse Effissimo’s proposal so that shareholders can work hand-in-hand with the Board to back a fair and impartial investigation.
1 Bold and underline added by Effissimo.
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