Is Toshiba embroiled in Japan’s ‘worst corporate scandal in a decade?’

FILE PHOTO: The logo of Toshiba Corp. is seen next to a traffic signal atop of a building in Tokyo, Japan June 11, 2021. REUTERS/Issei Kato

TOKYO (Reuters) – Japan’s trade minister said on Tuesday he was not planning to order up a probe into allegations made by an independent investigation that his ministry helped Toshiba Corp pressure foreign shareholders to fall in line with management’s plans.

Hiroshi Kajiyama, head of the Ministry for Economy, Trade and Industry (METI), also said it was normal for the government to deal with individual companies like Toshiba when matters of national security are at stake.

“We merely implemented policies that were natural for METI,” he told a regular post-cabinet news conference.

A shareholder-commissioned independent investigation last week alleged Toshiba management colluded with Japan’s trade ministry to block foreign investors from gaining board influence, in what one top Toshiba shareholder has called the world’s worst corporate scandal in a decade.

The explosive report has renewed concerns about corporate governance at Toshiba as well as Japan more broadly, though some investors have also said the successful push for the probe by activist shareholders and the report’s vindication of their assertions represents progress.

Kajiyama said, however, that he saw the report as an internal Toshiba investigation and did not think the report was all true.

Toshiba’s sprawling business includes some defence-related work, such as submarine batteries and radars. It also builds nuclear reactors.

(Reporting by Ritsuko Shimizu; Writing by Tim Kelly; Editing by Edwina Gibbs)

Editor’s comment:

This news comes amidst a growing scandal at Toshiba, where the Chairman, Osamu Nagayama, has refused to resign over a shareholder supported report accusing the company and its directors of assembling a Board that would ensure international shareholders were kept out. It will be interesting to see how much media and shareholder pressure is now put on the Trade Ministry and Toshiba itself. It could, indeed, be ‘the worst corporate scandal in a decade’ and if so, more heads will roll.

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