© Reuters. FILE PHOTO: The Toshiba Corp. logo. can be seen on February 13, 2017 in Kawasaki, Japan. REUTERS / Issei Kato
By Ross Kerber and Makiko Yamazaki
BOSTON / TOKYO (Reuters) – A former Japanese government adviser said he hadn't put pressure on the Harvard University Endowment Fund to influence its vote at Toshiba's (OTC 🙂 Corp.'s controversial shareholders meeting last year, and that the fund " to set the record “should”.
Hiromichi Mizuno, until recently advisor to the Ministry of Economy, Trade and Industry, was identified this month by a shareholder-commissioned investigation as a key figure in alleged management's collusion with METI to block the influence of foreign shareholders.
Mizuno told Reuters he volunteered to speak to METI officials to speak to Harvard Management Co when he was about to start a scholarship at the university last year.
Mizuno, a board member of US electric vehicle maker Tesla (NASDAQ 🙂 Inc, said he discussed potential risks to the Harvard fund known as HMC when voting at Toshiba. The conglomerate's largest shareholder, the activist hedge fund Effissimo Capital Management, pushed for board seats.
HMC was also an investor in Effissimo based in Singapore, sources previously told Reuters.
Mizuno made it clear to HMC that he did not represent the Japanese government, he said.
"I have no interest in how you vote," Mizuno told the foundation's directors.
Mizuno's comments to Reuters in a late Monday interview were his first public remarks about Toshiba since the investigation found management had partnered with METI to block the influence of Effissimo, HMC and other overseas shareholders and new details on the Announced talks. He had previously told the Financial Times that he did not represent the Japanese government.
Mizuno's account also sheds new light on the events at Toshiba. The incidents detailed in the investigation have rekindled concerns about Japan's corporate governance and openness to foreign shareholders, and appear to counter the government's long-term drive to attract more foreign investment.
An HMC spokesman declined to comment on this article.
A senior METI official with direct knowledge of the matter, who spoke on condition of anonymity, endorsed Mizuno's account and said it was not reflected in the investigation.
Toshiba declined to comment.
The independent investigation found that Mizuno's role affected the vote at the annual general meeting in July 2020 after HMC, which held a stake greater than 4%, abstained.
It was not clear how HMC was going to vote at the meeting.
Mizuno told Reuters he was trying to keep his dealings with Harvard friendly and has asked the fund for some clarification "to get the record right".
Mizuno is the former chief investment officer of Japan's $ 1.61 trillion pension fund. He resigned as special advisor to METI after being appointed special envoy of the United Nations, the government said in January.
& # 39; VERY INAPPROPRIATE & # 39;
Part of Mizuno's report contrasted with the investigation, which cited an HMC letter stating that prior to the shareholders' meeting, the Foundation received an unwelcome request from one person – apparently Mizuno – and "the exchange in substance as well as being highly inappropriate in terms of time ”. ".
The report said that even if Mizuno spoke as a private citizen, shareholders would understand his influence over the government.
METI has regulatory powers over Toshiba's overseas shareholders as the company is considered a strategic asset and manufactures nuclear and defense equipment.
Mizuno told Reuters in a follow-up message Tuesday that it served as a channel for HMC's news to METI and Toshiba after the fund became frustrated with the company being haunted by accounting and governance issues.
Toshiba shares have rebounded after hitting three-year lows last year. Shares are up 68% this year, outperforming an 8% increase in the Tokyo Index.
Mizuno said the leaders of the $ 41 billion foundation, chief executive N.P. "Narv" Narvekar and Chief Investment Officer Rick Slocum welcomed his contribution.
HMC did not make Narvekar or Slocum available for an interview.
Effissimo had nominated three candidates for the Toshiba board at the meeting on July 31st, all of which were rejected by management. None was elected, although one received 44% of the vote.
Mizuno said he wanted HMC to understand the potential ramifications of the vote, as new foreign ownership rules in Japan could review HMC's links with Effissimo.
Sources previously told Reuters that Mizuno has raised the possibility of a regulatory investigation if HMC votes against the interests of Toshiba's management.
Mizuno told Reuters he wanted to help HMC avoid surprises and urged Narvekar to vote on how HMC saw fit to discharge its fiduciary duty.
"I made it clear that I was just trying to provide enough information" for the Fund to understand how things work in Japan, he said.
($ 1 = 110.3700 yen)