Toshiba Shareholders Reject Plan to Split the Company

The shareholders of the Japanese conglomerate, Toshiba Corp have rejected the plan to split the company into two parts, reflecting strong opposition from foreign shareholders who want to auction the company to be auctioned to the highest bidders.

Toshiba would have spun off its electronic-device business and the remaining unit would have focused on energy and infrastructure businesses only, under the plan. 

The management and foreign shareholders of the company, holding half of the company have been at odds for years as the shareholders' push for higher returns and more extensive restructuring.

Many foreign investors have said that they did not believe the company's management and board of directors tried hard enough to solicit proposals from private-equity firms to buy the whole company. The shares of the company, which were slightly higher before the vote, fell on the news and were down about 3% in afternoon trading on Thursday. 

Toshiba shareholders also rejected the proposal by Singapore-based 3D Investment Partners Pte. Ltd., asking the strategic review committee of the company to consider alternatives such as selling the entire company to a private investor. Some shareholders said they did not want to give such specific instructions to the Committee.