Twists and turns, in the past home appliance giant split plan blocked again!

Institutional Shareholder Services Inc.(ISS), the largest Shareholder proxy advisory firm in the US, urged Toshiba investors to reject the proposed split in a report on Thursday, Bloomberg reported.

"A break-up is beneficial as it stands, but the execution risks associated with it do not conclude that break-up is superior to privatisation," ISS wrote in its report.

- Privatization spin-off proposal rejected twice

It is understood that in November 2021, the former home appliance giant announced a new medium-term business plan.

Plans to split the company into three by March 2024 in response to shareholder calls for a more centralised structure.

To boost its value, Toshiba plans to split the company into three by March 2024 in response to shareholder calls for a more centralized corporate structure. The original plan was to split its business into three companies, namely, infrastructure such as power generation, equipment such as hard disk, and semiconductor memory. It is expected to establish two new listed companies, infrastructure and equipment, in the second half of 2023, while Toshiba will retain its own semiconductor memory.

However, the plan has faced opposition from activist shareholders such as foreign asset managers since it was announced, who say a lack of transparency in the decision process has left its future uncertain.

Toshiba last month abandoned plans for a three-way split and proposed a split into two companies after several shareholders raised objections, Japanese media reported.

Under the new plan, Toshiba's semiconductor and equipment businesses will be spun off into a newly listed company, while infrastructure businesses will remain in Toshiba. It is also considering selling its affiliates such as the air conditioning business.

Who would have thought that, on Wednesday, the ISS again publicly opposed the plan.

- The former CEO disagreed and resigned, while the new CEO vowed to press ahead with the split

Toshiba announced new appointments earlier this month. Toshiba is positioning the personnel changes as a way to prepare for the split after former Chief Executive Satoshi Tsunakawa resigned and his replacement, Taro Shimada, vowed to press ahead with the plan.

Notably, Tsunakawa said before his resignation that he opposed the spin-off plan because going private could cost the company orders from utilities and local governments and force it to sell sensitive technology in areas such as nuclear, defense and cyber security.

- Toshiba, Toshiba, Toshiba for a new era

Founded in 1875, Toshiba was once a symbol of Japan's manufacturing industry. Half a century ago, Toshiba almost "dominated" the global home appliance market, according to international e-commerce. However, like other Japanese brands in the past, Toshiba's home appliance business has been losing money every year since 2008, as the rapid development of China's local manufacturing industry and the implementation of a new labor law have eroded the advantage of Japanese brands.

Since then, Toshiba, which racked up losses of Rmb12.5bn over three years between 2012 and 2015, has embarked on a slimming programme.

- "Weight Loss Plan" (incomplete)

In December 2013, Toshiba abruptly announced the closure of its LCD TV plant in Dalian, China, with the loss of 900 jobs.

In July 2015, Toshiba sold its stake in Finnish elevator maker Kone for $945m.

In 2015, Toshiba had to restate pre-tax earnings totalling 152 billion yen ($1.38 billion) over six years after an internal investigation found that management had overstated profits. Toshiba has been in turmoil since the accounting scandal, with senior executives resigning, billions of dollars in losses at its U.S. nuclear power business and the subsequent sale of its important chip unit.

In March 2016, Toshiba sold 80.1% of its home appliance business to Gome group of China for $477 million, trying to cut costs such as procurement through cooperation with Midea, while launching new product groups that did not have before, in order to increase market share and increase profits.

In the same year, SONY bought most of Toshiba's Japan Semiconductor division.

It then sold Toshiba Medical Systems, Japan's largest medical equipment supplier, to Canon for nearly $6 billion.

In 2018, Toshiba announced that it had sold 80 percent of its laptop business to Sharp, and the sale of the rest of its shares will result in Toshiba completely divested of its laptop business.

In June 2018, in order to fill the huge financial hole caused by the failure of the US nuclear power sector, Toshiba sold its Toshiba Memory Corporation to the "Japan-US-Korea Alliance" led by Bain Capital in 2018 for 18 billion yen. The business is now known as Kioxia Holdings Corp. Toshiba continues to hold almost 40 per cent of Kioxia and remains the majority shareholder.

In May 2019, Toshiba announced that it would further lay off about 350 employees in its semiconductor division and seek 823 early retirees to leave by the end of September. Toshiba also announced that it will cut 7,000 workers by 2023.

In January 2020, Toshiba was exposed to another accounting fraud scandal worth 20 billion yen (1.245 billion yuan).

In August 2020, Toshiba officially announced its exit from the notebook business and transferred its stake in Dynabook Inc. (formerly Toshiba notebook business) to Sharp, officially ending Toshiba's 35-year notebook business.

In September 2020, Toshiba announced its withdrawal from the system LSI market, marking the final stage of structural reform in the semiconductor business.

In November 2020, The Nikkei Industry Daily reported that Toshiba, a Major Japanese company that withdrew from the LSI chip market, intended to sell its subsidiary Japan Semiconductor in Kitagawa and Oita, iwate prefecture, as a package, and hoped that the buyer would retain the existing employees. The deal covers Japan Semiconductor shares. Umc is one of the interested buyers.