REUTERS/Issei Kato
- Toshiba board members planned to replace Nobuaki Kurumatani before the buyout bid, sources said.
- Kurumatani resigned from Toshiba on Wednesday. Chairman Satoshi Tsunakawa will replace him.
- The board chairman Osamu Nagayama went to a meeting “to fire” him, one of the sources told Reuters.
- See more stories on Insider’s business page.
Toshiba board members planned to oust CEO Nobuaki Kurumatani before CVC Capital Partners launched a $20 billion buyout bid last week, sources told Reuters.
Kurumatani on Wednesday resigned from Toshiba. Chairman Satoshi Tsunakawa, who led the company beforehand, will replace him.
The board told Kurumatani the day before the offer was announced that they would replace him, sources who didn’t want to be identified because of the sensitivity of the issue told Reuters.
On the subject of Kurumatani stepping down, Toshiba told Insider: “It is a resignation in the middle of the CEO’s term of office, which is unusual, but the resignation is decided by Mr. Kurumatani himself and should be respected.”
Two members of Toshiba Corp’s nomination committee, including board chairman Osamu Nagayama, met Kurumatani, himself a former CVC executive, before the buyout bid and told him they were looking for a new CEO, sources told Reuters.
Although the board hadn’t formally started the process of replacing Kurumatani, the plan was already in motion, Reuters reported. Nagayama, who also heads the nomination committee, went to the meeting “to fire” him, one of the sources said.
Reuters reported that Kurumatani then informed them of the European private equity firm’s plan to take Toshiba private. A day later, the Japanese conglomerate announced it had received the offer, two sources added.
The events of the meeting show how Kurumatani’s tenure was undone by his flagging popularity even before the offer was announced. It marked the culmination of deepening discord between Kurumatani and activist shareholders, who had raised concern over what they said were governance issues.
The plan to remove him appears to have accelerated after the meeting on April 6 at Toshiba’s headquarters in Tokyo. Toshiba on Wednesday said Kurumatani was stepping down after some three years as CEO.
Support for him both within the company and among investors had eroded, a person briefed on the matter said.
“A survey of managers at Toshiba showed low support for Kurumatani,” the person who was briefed said. There was “deep distrust” of him among shareholders, they added.
Toshiba said Kurumatani was stepping down to “recharge” after achieving his plan to revive the conglomerate that had been weakened by an accounting scandal.
Reuters was not immediately able to reach Kurumatani for comment about plans to have him replaced. Toshiba said it couldn’t comment on speculation. Nagayama declined to comment. A representative for CVC Japan declined to comment.