Japan's trade minister unapologetic about ministry's dealings with Toshiba

© Reuters. FILE PHOTO: The logo of Toshiba Corp. is seen next to a traffic signal atop of a building in Tokyo, Japan June 11, 2021. REUTERS/Issei Kato

By Ritsuko Shimizu

TOKYO (Reuters) -Japan's trade minister said on Tuesday he was not planning to order up a probe into allegations made by an independent investigation that his ministry helped Toshiba (OTC:TOSYY) Corp lean on foreign shareholders.

Hiroshi Kajiyama, head of the Ministry for Economy, Trade and Industry (METI), also said it was normal for the government to deal with individual companies when matters of national security are at stake.

"We merely implemented policies that were natural for METI," he told a regular post-cabinet news conference.

A shareholder-commissioned independent investigation last week alleged Toshiba management colluded with Japan's trade ministry to block foreign investors from gaining board influence, in what one Toshiba shareholder has called the world's worst corporate scandal in a decade.

The damning report has renewed concerns about corporate governance at Toshiba as well as Japan more broadly, though some investors have also said the successful push for the probe by activist shareholders and the report's vindication of their assertions represents progress.

Kajiyama said, however, that he saw the report as an internal Toshiba investigation and did not think the report was all true.

Toshiba's businesses include defence-related work such as submarine batteries and radars and it also builds nuclear reactors, making it strategically important to the government.

Reuters has previously reported Harvard University's endowment fund had been told by Hiromichi Mizuno, a METI adviser at the time, that it could be subject to a regulatory probe if the fund did not follow management's recommendations for board nominees at Toshiba's AGM last July.

The Harvard fund subsequently abstained from voting.

The investigators' report said Toshiba, working in unison with the trade ministry, "effectively asked" a government adviser, described as "Mr. M", to negotiate with the Harvard fund to change its voting behaviour.

Mizuno has not responded to requests for comment. Kajiyama said last week that he had been told by ministry officials that it was not true that any request was made to engage with individual investors.

The probe also found that Toshiba, with the ministry, tried to force Toshiba's top shareholder, Singapore-based Effissimo Capital Management, to withdraw shareholder proposals for board nominees aimed at improving governance.

In the wake of the report, Toshiba has said two board members will not be standing for re-election although Board Chairman Osamu Nagayama on Monday resisted calls to step down.