Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Exclusive: Harvard wasn't pressured over Toshiba, former Japan adviser says

Stock MarketsJun 23, 2021 12:46AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: The logo of Toshiba Corp. is seen at the company's facility in Kawasaki, Japan February 13, 2017. REUTERS/Issei Kato 2/2

By Ross Kerber and Makiko Yamazaki

BOSTON/TOKYO (Reuters) - A former Japanese government adviser said he did not put pressure on Harvard University's endowment fund to influence its voting at Toshiba (OTC:TOSYY) Corp's contested shareholder meeting last year, and that the fund should "set the record straight".

Hiromichi Mizuno, until recently an adviser to the Ministry of Economy, Trade and Industry, was identified by a shareholder-commissioned investigation this month as an important figure in what it said was management collusion with METI to block the influence of foreign shareholders.

Mizuno told Reuters he had volunteered to METI officials to speak with Harvard Management Co as he was about to start a fellowship at the university last year.

Mizuno, a member of the board of U.S. electric vehicle maker Tesla (NASDAQ:TSLA) Inc, said he had discussed potential risks for the Harvard fund, known as HMC, over voting at Toshiba. The conglomerate's top shareholder, activist hedge fund Effissimo Capital Management, was pushing for board seats.

HMC was also an investor in Singapore-based Effissimo, sources previously told Reuters.

Mizuno made clear to HMC that he was not representing the Japanese government, he said.

"I have no interest in whichever way you vote," Mizuno said he told the endowment's leaders.

Mizuno's comments to Reuters in an interview late on Monday were his first public remarks about Toshiba since the investigation found management colluded with METI to block the influence of Effissimo, HMC and other foreign shareholders, and provided new details about the talks. He had previously told the Financial Times he was not representing the Japanese government.

Mizuno's account also casts new light on events at Toshiba. The incidents detailed in the investigation have renewed concern about Japan's corporate governance and openness to foreign shareholders, and appear to cut against the government's long drive to win more foreign investment.

A spokesperson for HMC declined to comment for this article.

A senior METI official with direct knowledge of the matter, speaking on condition of anonymity, backed Mizuno's account and said it was not reflected in the investigation.

Toshiba declined to comment.

The independent investigation found Mizuno's role compromised the vote at the July 2020 annual general meeting after HMC, which held a more than 4% stake, abstained from voting.

It was not clear how HMC had planned to vote at the meeting.

Mizuno told Reuters he tried to keep his dealings with Harvard friendly, and has asked the fund for some clarifications "to set the record straight".

Mizuno is the former chief investment officer of Japan's $1.61-trillion pension fund. He resigned as a special adviser to METI after being named a United Nations special envoy, the government said in January.

'HIGHLY INAPPROPRIATE'

Some of Mizuno's account stood in contrast with the investigation, which quotes a HMC letter stating the endowment received an unwelcome request from a person -- apparently Mizuno -- before the shareholder meeting and "found the exchange to be highly inappropriate in both content and timing".

The report said even if Mizuno spoke as a private citizen, shareholders would understand his government influence.

METI has regulatory power over Toshiba's foreign shareholders because the company is considered a strategic asset, making nuclear and defense equipment.

Mizuno told Reuters in a follow-up message on Tuesday that he served as a channel for messages from HMC to METI and Toshiba after the fund became frustrated with the company, which has been dogged by accounting and governance issues.

Toshiba's shares have recovered after hitting a three-year low last year. The shares are up 68% this year, outperforming an 8% rise in Tokyo's TOPIX index.

Mizuno said the leaders of the $41-billion endowment, Chief Executive N.P. "Narv" Narvekar and Chief Investment Officer Rick Slocum, welcomed his input.

HMC did not make Narvekar or Slocum available for an interview.

Effissimo had nominated three candidates to Toshiba's board at the July 31 meeting, all of whom were opposed by management. None were elected although one received 44% of the vote.

Mizuno said he wanted HMC to understand the potential consequences of the vote, given that new rules on foreign ownership in Japan could put scrutiny on HMC's ties to Effissimo.

Sources previously told Reuters that Mizuno voiced the possibility of a regulatory investigation should HMC vote against the interest of Toshiba's management.

Mizuno told Reuters he had wanted to help HMC avoid surprises, and told Narvekar to vote however HMC felt was right to satisfy its fiduciary duty.

"I made it clear I was only trying to give enough information" for the fund to understand how things worked in Japan, he said.

($1 = 110.3700 yen)

Exclusive: Harvard wasn't pressured over Toshiba, former Japan adviser says
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email