From scandal to delisting: Toshiba’s long-running crisis

Toshiba on Wednesday ends its 74-year history as a listed company as a consortium led by Japan Industrial Partners (JIP) takes the company private.

This follows a decade of upheaval and scandal that brought down one of Japan’s biggest brands and ushered in a buyout and an uncertain future.

The buyout is expected to draw a line under the Japanese conglomerate’s troubled history.

Here is a timeline of Toshiba’ problems since 2015.

2015 – Toshiba discloses accounting malpractices across multiple divisions, which involved top management. It overstated pretax profit by YEN230bn ($1.59bn) over seven years.

December 2016 – Toshiba says it will take a charge of several billion dollars related to a nuclear power plant construction company that US unit Westinghouse Electric had bought a year earlier.

March 2017 – Westinghouse files for Chapter 11 bankruptcy. Faced with more than $6bn in liabilities linked to Westinghouse, Toshiba decides to put prized chip unit Toshiba Memory up for sale.

September 2017 – Toshiba agrees to sell the chip business to a consortium led by Bain Capital for $18bn, while retaining a large stake.

The company is desperate to close the deal by the end of the financial year in March to help right its finances and avoid a potential delisting.

That is jeopardised by a prolonged dispute over the sale with Western Digital, its partner in a chip joint venture. Antitrust reviews are expected to take months.

December 2017 – Toshiba secures a $5.4bn cash injection from more than 30 overseas investors, helping it avoid a delisting but bringing in prominent activist shareholders including Elliott Management, Third Point and Farallon.

Dispute with Western Digital is settled.

Jan. 2020 – Toshiba finds further accounting irregularities at a wholly owned subsidiary.

July 2020 – Five director candidates nominated by activist shareholders get voted down at an annual general meeting.

September 2020 – Toshiba discloses that more than 1,000 postal voting forms for its AGM went uncounted. The bank that counted the votes, Sumitomo Mitsui Trust Bank, later reveals widespread failure to count all valid votes at AGMs of client firms over past two decades.

March 2021 – Shareholders approve an independent investigation into allegations that investors were pressured ahead of the previous year’s AGM.

April 2021 – CVC Capital Partners makes an unsolicited $21bn offer to take Toshiba private.

A week later, Toshiba’s CEO resigns over the CVC bid, perceived by some within company management as designed to shield him from activist shareholders.

Toshiba’s subsequent dismissal of the CVC offer angers some activist shareholders.

June 10, 2021 – A shareholder-commissioned investigation concludes Toshiba colluded with Japan’s trade ministry – which sees Toshiba as a strategic asset – to block overseas investors from gaining influence at 2020 shareholder meeting.

June 25, 2021 – Shareholders oust board chairman Osamu Nagayama after critics accuse the board of failing to address allegations that it pressured investors.

Toshiba pledges to undertake a full review of assets and engage with potential investors.

November 2021 – Toshiba says it will split into three companies, one for energy, one for infrastructure and the third to manage its Kioxia stake.

Feb. 2022 – Toshiba announces a new plan to split into two, spinning off only its devices unit.

March 1, 2022 – CEO Satoshi Tsunakawa resigns. Taro Shimada, a former Siemens AG executive who joined in 2018, appointed as interim CEO to proceed with the spin-off plan.

March 24, 2022 – Shareholders vote against spin-off plan. A separate motion backed by activist shareholders that called for the conglomerate to solicit buyout offers also fails to pass.

April 2022 – Toshiba sets up a special committee to resume a strategic review that could see it taken private.

May 13, 2022 – Ten potential investors express their interest. Under pressure from shareholders, Toshiba announces a special dividend of around $545m.

June 2022 – Toshiba receives eight buyout proposals. Directors publicly trade criticism over governance and the nomination of hedge fund executives to its board. Shareholders later approve two activist directors, a historic shift.

July 2022 – Toshiba selects four bidders, including private equity firms Bain Capital, CVC Capital Partners and a consortium involving JIP and state-backed Japan Investment Corp (JIC) to proceed to a second bidding round. JIC and JIP disagree over the proposal and decide not to pursue a bid together.

October 2022 – The JIP-led consortium, involving a number of Japanese firms such as Orix Corp and Chubu Electric Power Co, is given preferred status.

February 2023 – After months of speculation, Toshiba confirms that it has received a proposal from an all-Japanese group led by JIP, which sources said secured $10.6bn in loan commitments.

March 2023 – Toshiba’s board accepts JIP’s YEN2tn tender offer at YEN4,620 a share, versus its last closing price of YEN4,213.

August 2023 – JIP launches the tender offer with recommendations from the Toshiba board. The tender offer ended in success in September.

December 20, 2023 – Toshiba ends its 74-year history as a listed company.