Effissimo Capital Management: Our Thinking as It Relates to Proposal No. 3 at Toshiba Corporation’s Extraordinary General Meeting of Shareholders

SINGAPORE--(BUSINESS WIRE)--At the Extraordinary General Meeting of Shareholders for Toshiba Corporation (“Toshiba”), to be held on March 24, 2022, Proposal No. 3, “Re-examination of strategy adopted by the Strategic Committee and the Board of Directors,” has been submitted as a matter of business to be put to vote. The views of Effissimo Capital Management Pte Ltd (“We”, “Our”) on this proposal are explained below.

We announced in a March 10, 2022 press release that we cannot support Proposal No. 1 due to our belief that Toshiba’s management is unstable, and that its management structure cannot be entrusted with irreversible and highly consequential decisions.

It is imperative that Toshiba expeditiously establish a solid management structure that is trusted by stakeholders. To that end, we believe that establishing a sound managerial foundation, through the invitation of a specific and limited number of strategic and financial investors as new partners to replace the currently dispersed shareholder base, would rebuild and shore up corporate governance and provide sufficient runway for properly formulating and executing long-term corporate strategy. This is one of the credible options that would help Toshiba form a robust management structure trusted by shareholders and other stakeholders. Accordingly, it should be seriously considered as a means of enhancing Toshiba's medium- to long-term corporate value.

Toshiba has repeatedly said that it should not rule out the option of restructuring its management structure with strategic and financial investors as partners, and that it will evaluate and consider any sincere proposal. It has also said that the Strategic Review Committee has in fact mulled such proposals. Proposal No. 3 is one that will likely encourage Toshiba to again deliberate upon such an option in a robust and more transparent manner.

In light of the above, Effissimo has decided that it will vote in favor of Proposal No. 3.

Please note that, while Proposal Nos. 1 and 3 are non-legally binding advisory resolutions, Toshiba should view shareholder votes here as a signal to be taken very seriously. We hope management will not limit itself to merely noting the top-line results in terms of majority shareholder approval or disapproval, and that it will instead take into account the message conveyed through the votes and apply it to forthcoming management decisions.