Skip to main content
Access every election story that matters
Enjoy unlimited digital access
$1.99
per week for 24 weeks
Access every election story that matters
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
// //

A senior member of Japan’s ruling party on Thursday accused activist investors in Toshiba Corp of focusing only on short-term profits and called for better monitoring of such investors to protect economic security.

Once a crown jewel of corporate Japan, Toshiba has been battered by accounting scandals stretching back to 2015 and massive writedowns for its U.S. nuclear business as well as the sale of its semiconductor unit, leaving it a shadow of its former self.

The comments from Akira Amari, a former economy minister and an influential lawmaker in the ruling Liberal Democratic Party, are some of the sharpest yet after an investigation commissioned by Toshiba shareholders revealed this month that Toshiba’s management colluded with the government to put pressure on foreign activist investors to support the management.

Story continues below advertisement

“There should be strict monitoring. We need to watch carefully so that Japan’s security is not threatened,” Amari told Reuters in an interview.

He said it was “not right” that Toshiba was reliant on activist investors who were only interested in short-term profits and did not understand the importance of the conglomerate to Japan’s “economic intelligence.”

“Activist investors only think about selling high,” he said.

His comments are likely to deepen concern among foreign investors about Japan’s openness to their investment.

Japan introduced new foreign ownership rules in 2020 aimed at protecting industries critical to national security but the investigation commissioned by shareholders found that the company and the government deviated from the purpose of the rules.

But Amari stressed there was no problem with the government’s response to the company’s troubles.

After the investigation was published, Toshiba said it would change its board director nominees, with two audit committee members stepping down.

Story continues below advertisement

The committee has come under scrutiny as the investigation alleged it failed to take action even when it became aware of Toshiba’s attempt to prevent shareholders from exercising their rights.

Toshiba’s management has been under pressure from activist funds since it sold 600 billion yen ($5.4-billion) of stock to dozens of foreign hedge funds during a crisis stemming from the bankruptcy of its U.S. nuclear power unit in 2017.

Singapore-based Effissimo Capital Management, 3D Investment Partners and U.S. hedge fund Farallon Capital Management together own more than 20 per cent of Toshiba.

Amari said Japanese investors, not foreign activists, should have invested in Toshiba to save the company.

Toshiba is due to hold a shareholder meeting on Friday when its board chairman, Osamu Nagayama, is expected to face a vote over his reappointment.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies