Toshiba CEO losing support among employees, poll finds

[TOKYO] Toshiba Corp's Chief Executive Officer Nobuaki Kurumatani has seen a sharp drop in support from executives and other employees in internal surveys, according to people familiar with the matter.

Employees who have confidence in the CEO fell to less than 60 per cent in an internal January poll, down from more than 90 per cent last year, said the people who asked not to be identified as the process is private. More than 20 per cent expressed a lack of confidence in his leadership, up from less than 5 per cent previously they said.

The survey results prompted Toshiba to conduct detailed interviews with a narrower group of about 30 top executives and more than half of them expressed a lack of confidence in Mr Kurumatani. Toshiba implemented its internal survey system in 2016 as the company was recovering from a years-long accounting scandal.

Toshiba spokeswoman Midori Hara confirmed that the company conducts the survey every year without disclosing the results.

Shares gave up some of their gains after Bloomberg's report, with the stock up 5.7 per cent after rising as much as 7.6 per cent earlier in the day.

The declining confidence raises questions about Mr Kurumatani's future at the company as it confronts activist shareholders and a potential buyout offer. CVC Capital Partners, a UK-based fund where Mr Kurumatani previously worked as Asia chief, expressed preliminary interest in acquiring the company for about 5,000 yen per share, Bloomberg News has reported. The University of Tokyo graduate and longtime banker has been CEO and president of Toshiba since 2018.

Mr Kurumatani is aware of the survey results and that they may affect his future at the company, one of the people said. The board is sceptical of the CVC proposal because it included few concrete details, the person said, adding that the private equity firm said it would respect current management.

The surveys don't have any binding force. But the result could prompt Toshiba's nominations committee to remove Mr Kurumatani from its list of director recommendations put forward to shareholders in June, one person said, because the no-confidence levels were by far the highest since the system was installed.

Mr Kurumatani faces opposition outside the company too. He held on to his position by a slim margin last year, when only 57.2 per cent of Toshiba shareholders approved of keeping him in the job. Questioning the transparency and process of that vote, Toshiba's largest investor Effissimo Capital Management has requested an independent investigation, which was green-lit at an extraordinary shareholder meeting in March.

BLOOMBERG