Toshiba Corp. investors approved the sale of its memory chip unit and backed the appointment of new board members over the objections of proxy advisers.
The company’s shareholder meeting voted in 10 directors, including President Satoshi Tsunakawa. Glass Lewis & Co. and Institutional Shareholder Services Inc. earlier this month advised against supporting Tsunakawa’s nomination and raised questions over governance at Tokyo-based Toshiba. Tuesday’s meeting also approved full-year earnings results which received a qualified endorsement from its auditor.
Toshiba is selling its memory unit to repair its balance sheet after losing billions of dollars from a disastrous move into nuclear power plants. Trouble at the Westinghouse unit held up the release of earnings results several times before auditor PricewaterhouseCoopers Aarata gave a qualified endorsement for the figures along with explicit criticism of internal controls. The energy debacle followed an accounting scandal in 2015 after the company revealed it has overstated profits for seven years .
“I would like to apologize from the bottom of my heart first and foremost to the shareholders,” Tsunakawa said at the meeting held outside Tokyo.
Glass Lewis recommended voting against 9 out of 10 board member nominations, while ISS voiced opposition to five. Tsunakawa should be held responsible for continued losses and the failure to establish internal controls, ISS said. Glass Lewis reiterated concerns over accounting irregularities at Toshiba’s medical business that occurred under his leadership.
Toshiba aims to complete the sale of the chip unit by March, helping the company avert a capital deficit that could lead to its delisting. The deal is being challenged by manufacturing partner Western Digital Corp. and still needs to receive regulatory approval. Toshiba is considering alternative options in case the sale doesn’t close, Tsunakawa said, without giving further details.