Shareholder Payments Planned at Y100 Billion Over Two Years
Toshiba Corp. said that it would split into three separate companies to boost shareholder value in response to activist pressure following years of scandal and mismanagement.
The corporation announced that it would separate its core activities into two new public companies, one for infrastructure services and the other for technology devices, with the remaining business moving to a pioneering memory chip manufacturer.
The split is slated for completion in the second half of fiscal 2023
Toshiba plans to pay 100 billion yen ($ 875 million) in dividends to shareholders over the next two years. The company’s usual strategy of staying ahead of the curve is reflected in today’s announcement. “To improve its competitive positioning, each business now requires more flexibility to meet its own market opportunities and challenges,” said Satoshi Tsunakawa, the company’s CEO.
Toshiba has been a source of controversy for a long time, at least since 2015, when it was forced to pay the country’s largest fine for falsifying financial statements. Following that, the company embarked on a doomed nuclear power venture that resulted in a $6.3 billion write-off.
The tripartite split is one of the most daring measures taken by the Japanese behemoth to combat the so-called conglomerate discount problem. Japan has long been a place where a single company manages a diverse range of businesses, a strategy that has been criticised for lowering stock prices and suffocating innovation in other countries.
At a press conference, Tsunakawa said, “All we see ahead of us is a bright future.” “We will work to provide additional benefits to all stakeholders and society as a whole.”