Jun 10 (Reuters) - Japan's trade ministry colluded with Toshiba Corp's (6502.T) management to unduly influence a key shareholder vote last year, an independent probe found, undermining Tokyo's efforts to improve corporate governance and win over foreign investors.
The investigators' report released on Thursday marks an explosive turn in a long-running battle between the Japanese company's management and foreign shareholders, which include activist investors and Harvard University's endowment fund. It alleges the Ministry of Economy, Trade and Industry (METI) leaned on the Harvard fund and other foreign investors in an attempt to get them to vote along with management at last year's annual shareholders meeting. The allegations of METI's intervention - previously reported by Reuters - are likely to raise doubts about how committed Japan is to becoming more open to foreign capital - a goal set by former Prime Minister Shinzo Abe. The report also raises questions about who in government was aware of METI's role. "Toshiba requested METI's support for the so-called measures to counter the activists" at the annual general meeting, the report, written by independent investigators, found. Toshiba's management "worked closely" with the ministry to exert "undue influence on some shareholders," the report found. Contacted by Reuters, METI said it was aware of the report and was looking into its contents. Toshiba said it would "carefully review" the report and comment at a later date. In one telling episode from the report, the ministry was said to have contacted one foreign fund to warn it against "barbecuing next to your neighbour when there is a big fire," in an apparent suggestion the fund should refrain from backing proposals by top shareholder Effissimo Capital Management, a Singapore-based fund, the report said.
