Japanese Toshiba CEO Resigns Over Restructuring Efforts | Economic news

By YURI KAGEYAMA, AP Business Writer

TOKYO (AP) — Toshiba chief executive Satoshi Tsunakawa is stepping down as the Japanese tech giant seeks to restructure itself and restore its reputation.

Tsunakawa will be replaced by Taro Shimada, the company’s chief executive and senior vice president, under a decision reached at a meeting of Toshiba’s board of directors on Tuesday, the Tokyo-based company said.

Shimada was an executive at Siemens, in Japan and the United States, before joining Toshiba Corp. in 2018, working in its digital operations.

He faces the challenge of leading a restructuring plan that has drawn criticism from shareholders. In February, Toshiba announced plans to split into two companies, one focused on infrastructure and the other on devices.

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Shimada said he is proud to be the first CEO with a background in digital technology and hopes it will be a plus for Toshiba’s energy business.

“I’ve only been with Toshiba for three years, but I love Toshiba,” he said.

When asked how he hoped to win over critical shareholders, Shimada said he learned from working in the United States the importance of communicating on an equal footing, referring to the phrase “stand instead of someone else”.

The restructuring proposal is still subject to shareholder and regulatory approval. An extraordinary general meeting is scheduled for March 24, the date on which the plan will be put to the vote. Toshiba officials told reporters the management change had to happen before that, although it was unclear how that would help convince shareholders.

Toshiba dropped its previous three-way spin-off proposal, which was not popular with shareholders, including overseas funds.

Approval of Tuesday’s personnel changes, including the resignation of another board member and the appointment of two others, will be sought at a June shareholder meeting, Toshiba said.

Toshiba used to be one of Japan’s most revered brands, but it’s been struggling since the Fukushima nuclear disaster in March 2011. A tsunami blew up three reactors, spewing radiation across an area that’s still partly a no-go zone . Toshiba is involved in the dismantling effort, which will take decades.

The company’s reputation was also tarnished by an accounting scandal, involving books that had been doctored for years.

In 2021, Nobuaki Kurumatani stepped down as Toshiba chairman and Tsunakwa took the helm. Kurumatani had led the Japanese operations of global fund CVC Capital Partners and became CEO in 2018.

Tsunakawa said he had accomplished his mission to pass management to the next generation and hoped Toshiba shareholders, customers and employees would agree with the proposed restructuring plan. He did not say how the company handled dissent.

“I am confident that I have been able to convey leadership towards the evolution of Toshiba into the future,” he told reporters during an online press conference.

He defended the decision to appoint Toshiba people, not outsiders, to leadership positions, stressing that the company needed to change from within. This may be Toshiba’s “last chance” to cement its reputation and brand power as a technology company and regain trust, he said.

Founded in 1875, Toshiba was a pioneer in manufacturing everything from electric rice cookers to laptop computers. He also invented flash memory, although that division was sold off as his fortunes plummeted.

Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

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