Japanese government adviser lobbied Harvard over probe ahead of Toshiba vote – sources
TOKYO (Reuters) – A Japanese government adviser has told the Harvard University endowment fund that his vote at Toshiba Corp’s annual shareholder meeting could face a regulatory probe if he votes against it. company management, four sources said.
As a result, the American university abstained from voting, three of the sources said. He later learned there was no basis for an investigation, two of them said.
The alleged comment by Hiromichi Mizuno, special adviser to the Ministry of Economy, Trade and Industry (METI), contradicts Japan’s efforts to improve corporate governance and draws attention to a meeting that prompted complaints from shareholders.
The Financial Times previously reported that Mizuno told the fund that a vote against management would damage Harvard’s reputation. His mention of a potential investigation and other details of his dialogue with the university are reported here for the first time.
Mizuno did not respond to requests for comment from Reuters sent both by registered mail and by direct message to his actively used Twitter account.
Following the publication of this article by Reuters, Mizuno wrote on Twitter: “I am a METI adviser and a senior fellow of Harvard and I have a long relationship of trust with the endowment fund and as such, I am sometimes called upon for consulting.
“However, it is extremely regrettable that this article, based on testimony from anonymous sources, is written as if the CEO/CIO had been threatened by me on behalf of METI over the exercise of voting rights.”
A METI official said the ministry was unable to comment on the matter and never asked Mizuno to contact Toshiba shareholders.
Mizuno is the former chief investment officer of the $1.4 trillion Japanese government retirement investment fund and a current board member of U.S. electric vehicle maker Tesla Inc. Reuters could not determine his relationship with Toshiba.
A Toshiba spokeswoman said the company was unable to comment. A spokesperson for Harvard Management Company declined to comment, while its chief executive, NP “Narv” Narvekar, did not respond to a request for comment. The four sources declined to be identified as the matter was private.
Mizuno contacted Harvard weeks before the July 31 meeting after hearing he was frustrated with Toshiba’s governance, two of the sources said. Toshiba was dogged by accounting issues, and in January revised its financial statements again.
Harvard’s $41 billion endowment owns more than 4% of Toshiba and invests in Singapore-based activist hedge fund Effissimo Capital Management, Toshiba’s largest shareholder with a 9.91% stake, the sources said. .
Mizuno’s initial approach was friendly, but his dialogue with Narvekar via emails and calls soured the weekend before the meeting as deadlines approached for foreign funds to tell local depositories how to vote, said two of the sources.
On a call, Mizuno raised the issue of foreign ownership regulations, the four sources said, referring to a rule that says foreign funds that together own 10% or more of a listed company must report when they intend to coordinate during the vote.
It focused on Harvard’s relationship with Effissimo and voting on board nominees put forward by the hedge fund, two sources said.
Mizuno raised the possibility of a regulatory probe if Harvard votes against Toshiba’s management interests, four sources said. Harvard ultimately abstained, three said.
Reuters could not determine whether Harvard and Effissimo had agreed to coordinate the vote. Effissimo declined to comment.
Opponents of Toshiba’s leadership have complained about perceived governance shortcomings under chief executive Nobuaki Kurumatani, who retained his post with 57% of the vote. That’s up from 99% last year in a country where CEOs typically receive overwhelming support.
Effissimo’s three candidates ran into management opposition and were not elected, although one received 44% of the vote.
Effissimo has since called an extraordinary meeting of shareholders to assemble a team of legal experts to investigate, saying some shareholders’ voting rights were compromised.
Reporting by Makiko Yamazaki; Additional reporting by Daniel Leussink; Editing by David Dolan and Christopher Cushing