TOKYO (Kyodo) -- Toshiba Corp. President and CEO Nobuaki Kurumatani will resign, sources with knowledge of the matter said Tuesday amid a perceived management rift over a potential buyout by British private equity firm CVC Capital Partners.
Toshiba's board of directors will meet on Wednesday, and Kurumatani is expected to offer his resignation. Chairman Satoshi Tsunakawa will succeed him, according to the sources.
The meeting will be held a week after CVC Capital Partners' envisaged plan emerged to take Toshiba private and help protect it from foreign activist shareholders, who are disgruntled with Kurumatani.
The potential buyout of Toshiba would be worth over 2 trillion yen ($18 billion), as CVC is seen offering 5,000 yen per share. But the British firm may face hurdles before it can complete the purchase that would require screening by the Japanese government for national security reasons and support from existing shareholders. Toshiba's operations include nuclear power and defense businesses.
Kurumatani joined Toshiba as chairman and CEO in 2018 after serving as chairman of CVC's Japan unit. Some board members, including outside director and chairman of the Toshiba board Osamu Nagayama, have raised questions about Kurumatani's management style, seen as advocating the removal of activist shareholders, the sources said.
Some perceive CVC's buyout plan as being the result of Kurumatani's camp soliciting help from the British firm, according to the sources.
The internal feud could come as a blow to the Japanese household name Toshiba, which has been seeking to improve governance, especially since an accounting scandal in 2015 that, along with the 2017 bankruptcy of its U.S. nuclear plant subsidiary, forced the firm to undergo sweeping restructuring. Toshiba accepted investments from activist shareholders when it was reeling from the crisis.
Kurumatani has seen diminishing support from investors and his team. At the general shareholders meeting in July 2020, 57.96 percent supported Toshiba's move to keep him in the post. It stood at 99.43 percent a year earlier, according to Toshiba.
At an extraordinary shareholders meeting held in March, a proposal by Singapore-based Effissimo Capital Management Pte. Ltd. was approved, a rare victory for shareholder activism in corporate Japan.
CVC is expected to make a final proposal to buy Toshiba around June and launch a tender offer in July or August, sources with knowledge of the matter have said.