Reuters revealed on the 23rd that an adviser to the Ministry of Economy, Trade and Industry of the Japanese government had secretly threatened the shareholder representative of the Harvard Endowment Fund: if he did not support the current CEO at the Toshiba shareholders’ meeting, he would be investigated by the Japanese government.
According to people familiar with the matter, the representative of the Harvard Foundation finally abstained from voting, and the CEO was not replaced. However, they later learned that there was no factual basis for the threat investigation.
According to reports, Hiromichi Mizuno, a special adviser to the Ministry of Industry and Industry of Japan, who used to be the world’s largest pension fund and the former chief investment officer of the Japanese government pension investment fund (GPIF), which manages $1.4 trillion in assets, was hired by Tesla as an independent director in April this year.
The Harvard Endowment Fund is the largest university endowment fund in the United States, valued at $40.9 billion in 2019, managed by Harvard Management Company.
According to people familiar with the matter, Harvard Fund has a direct stake of more than 4% in Toshiba and invests in Effissimo Capital Management, a Singaporean fund company founded by Toshiba’s largest shareholder (9.91% stake), a member of Haramurakami Fund.
Toshiba, which has been involved in the accounting scandal for a long time, revised its financial report data again in January this year, causing shareholders to be dissatisfied with its operation and management.
At the annual shareholders’ meeting held on July 31, Effissimo Fund launched three candidates, planning to vote to replace Toshiba’s former CEO Cheya Shoaki.
Chetani’s approval rating was as high as 99% last year, but this year he only won 57% of the vote to retain his position. According to Reuters, such a low approval rating is rare in Japanese companies, and the highest vote of the other three is only 44%.
Effissimo said last week that some shareholders’ votes were “disturbed” and called for an emergency meeting and a legal team to investigate.
The Financial Times has revealed that Hiromichi Mizuno warned the Harvard Fund before voting that voting against Toshiba’s current management would “damage Harvard’s reputation”. Reuters was the first to disclose that he threatened Narvika, CEO of Harvard Fund.
Four people familiar with the matter said that a few weeks before the vote, Mizuno began to contact Narvika by email to persuade him not to oppose Toshiba management such as Cheya, and initially had a “friendly attitude”.
However, after discovering that the other party was not moved, Mizuno raised the topic of foreign shareholders’ supervision.
The Japanese government stipulates that foreign funds holding more than 10% of a listed company must declare that they have not privately coordinated in the shareholder vote.
In a call, Mizuno focused on the relationship between the Harvard Foundation and Effissimo, and hinted that if Harvard supported Effissimo’s candidate, it might be investigated by the Japanese government.
Three people familiar with the matter confirmed that the Harvard representative finally abstained from voting at the shareholders’ meeting. Two of them said that they were later informed that there was no factual basis to support such an investigation. Reuters commented that the revelation contradicts the Japanese government’s attempt to improve corporate governance.
At present, Hiromichi Mizuno, Narvica and Harvard Foundation have not responded to Reuters’ reports. Japan’s Ministry of Economic, Economic and Industry said it was inconvenient to evaluate the matter and never asked Mizuno to contact shareholders of Toshiba. A spokesman for Toshiba declined to comment.