Toshiba restructuring plan nixed

Shareholders of embattled Japanese electronics and energy giant Toshiba Corp. voted down a major restructuring plan on Thursday, in a setback for the company’s management.

The plan proposed last month called for splitting Tokyo-based Toshiba Corp. into two companies: one is focused on infrastructure; the other, on devices. The latter would have been spun off.

Some shareholders, including foreign investment funds and United Statesbased proxy advisory firm Institutional Shareholders Services, opposed the plan.

Toshiba management had scrapped an earlier proposal for a three-way split and put forward the latest plan, which was put to a vote at Thursday’s extraordinary shareholders’ meeting.

That new plan failed to win a majority of votes, in a huge setback for Toshiba management, which had defended the new plan as less costly and more stable.

One top executive had characterized the move as the company’s “last chance” to fix its brand power and win back people’s trust.

Shareholders also rejected a proposal from major shareholder 3D Investment Partners, based in Singapore, asking for a fuller objective review of strategic alternatives, including a buyout.

During the meeting, shareholders — including several who identified themselves as former Toshiba workers — got up and said the restructuring plan wasn’t in the best interests of Toshiba or its employees. Others said splitting a company won’t produce value.

Toshiba management had defended the new plan as less costly and more stable than possible alternatives.