April 14, 2021: Nobuaki Kurumatani, the CEO of Toshiba has resigned after a buy out offer worth $20billion from CVC Capital Partners, a private equity fund stirs upheaval. The company had just this year won back its spot on the first section of the Tokyo stock exchange following sweeping restructuring after years of turmoil and tainted by bankruptcy and accounting scandals.
The man in question, Kurumatani has declined to appear before journalists, but his departure comes as board members raise questions about the buyout offer from CVC Capital Partners, where Kurumatani formerly headed Japanese operations. But his departure is likely to be seen as a reflection of internal disagreements over the CVC offer. According to the Financial Times another private equity fund, KKR, is planning to offer its own larger buyout proposal and a Canadian Brookfield Asset Management, was also exploring a possible offer.
Kurumatani worked for the CVC between 2017 and 2018 and his departure will remove uncertainty over potential conflicts of interest. It will also force the board to seek other offers that are in the best interests of shareholders.
Accepting the CVC offer would take Toshiba private and de-listing the firm could produce faster decision-making by Toshiba’s management, which has clashed with shareholders recently and could also allow Toshiba to concentrate resources on renewable energies and other core businesses.
The new CEO Satoshi Tsunakawa said about the CVC offer, “We will make the best choice for shareholders, our employees, and society”. CVC hopes to secure financing assistance for its buyout bid and Toshiba last week warned that was likely to involve “a substantial amount of time and considerable complexity”.
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