Toshiba Corp, which has faced pressure from some big shareholders over its investment strategy, said on Friday that it would hold an extraordinary meeting on March 18 and promised to return excess capital to investors.
The decision follows separate demands for such an extraordinary shareholder meeting from two large investors – Singapore-based Effissimo Capital Management and U.S. hedge fund Farallon Capital Management.
The usage of excess capital is a focal issue raised by Farallon Capital, which is asking Toshiba to seek shareholders’ approval over what it said was a change in investment strategy in favour of large-scale mergers and acquisitions.
“Capital in excess of the appropriate level will be used for shareholder returns,” executive officer Masaharu Kamo said at an earnings briefing, an apparent change in tone from November when he said the firm would be proactive in making investments including M&A.
Kamo had said three months ago that the company “would use excess funds to buy back shares if no there are no strategic investment opportunities” that meet its criteria.
On Friday, though, he said the company had made no change in its policy on shareholder returns.
Farallon has bashed Toshiba‘s poor M&A track record, saying the company has recorded a total of about 1.8 trillion yen ($17.4 billion) of impairment losses in the past 20 years resulting from “heedless growth investments”.
Farallon declined to comment on Toshiba‘s latest statement on excess capital.
Toshiba said its third-quarter operating profit doubled from the same period a year earlier to 20.9 billion yen ($199.45 million), boosted by strong demand for automotive power-management chips amid a global chip shortage.
Its chip plants are running nearly at full capacity and the company is preparing to boost production, Kamo said.
Toshiba maintained its profit forecast for the year ending March at 110 billion yen, down 15.7% from the previous year.