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Toshiba Corp Chairman Osamu Nagayama and another board member failed to get shareholder approval for their reappointments, as nine of the other candidates were approved.
Nagayama was under pressure to resign after an independent investigation revealed that Toshiba officials colluded with the Japanese government to control foreign investors’ influence.
Major shareholders and investment fund Effissimo alleged that Toshiba didn't fairly carry out Effissimo's nomination of dissident directors.
They demanded Nagayama's ouster as the latter has the most responsibility in nominating candidates and on the board's behavior.
Besides Effissimo, which owns a 10 percent stake in Toshiba, other foreign investors include Harvard University’s endowment fund and 3D Investment Partners.
Nagayama had vowed to restore transparency, get to the bottom of what happened, and prevent a recurrence.
In an open letter to shareholders, Nagayama sought backing for his reappointment, pledging to be an agent of positive change rather than as a protector of the status quo.
