Technology group – Toshiba separates – economy

Japanese technology group Toshiba wants to split into three listed companies. The long-established company announced it. Under heavy pressure from foreign shareholders, the long-stumbling group of companies hope to use this unprecedented step for Japan to boost profitability in key areas in the future. The group, founded in 1875, is one of the best-known names in the Japanese economy. However, the disastrous foray into the nuclear power industry in the United States and a balance sheet scandal brought Toshiba to the brink in the middle of the last decade.

As part of a medium-term business plan, the area of ​​infrastructure and electronic products should be separated into separate companies. Toshiba would then remain the semiconductor memory sector. Just a few days ago, the American industrial group General Electric (GE) announced that it would also split into three companies. GE and Toshiba are long-standing partners and cooperate in areas such as offshore wind turbines. At General Electric, companies for aviation, medicine and another company will be created in the future, which will cover the trades of renewable energies, energy production and digitization.

With the split, now also planned at Toshiba, the Japanese conglomerate meets the growing demands of activist shareholders in terms of transparency and efficiency. In June, an independent investigative body found that Toshiba executives were working with the Ministry of Economy, Trade and Industry to prevent foreign shareholders from influencing the board by sending directors. Two senior executives then had to leave their posts. CEO Satoshi Tsunakawa justified the relationship with the ministry on the grounds that Toshiba’s business is important to Japan’s national security. Toshiba has gone “too far”, however.

Foreign shareholders own a large portion of Toshiba’s shares. In a report presented on Friday, the group admitted that senior executives such as former boss Nobuaki Kurumatani violated business ethics by approaching the powerful Ministry of Industry, but they did not violate any laws. Toshiba has been accused of being too dependent on the ministry and having excessive reserves on foreign mutual funds. Kurumatani abruptly resigned in April amid internal disputes over a multibillion-dollar takeover bid by UK financial investor CVC Capital Partners.

Related Articles

Back to top button