Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

Toshiba ToSTNeT-3 Buyback For All The Marbles, and 🐓s

Toshiba's 2020 AGM Investigative Report Is Damning

How Much of Toshiba Is Owned By "Activists"? The Answer

With Directors Under Fire, Toshiba Axes Two, May Need Another EGM

Gravity Works As WeWork Doesn't; Now Plan B

Quiddity Advisors

Event-Driven

<a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a> held its AGM today. It did not turn out well for the home team. As discussed in <a href="https://www.smartkarma.com/insights/with-directors-under-fire-toshiba-axes-two-may-need-another-egm" target="_blank" data-smartkarma-citation="insights:52998" rel="noopener">With Directors Under Fire, Toshiba Axes Two, May Need Another EGM</a>, after the Independent Investigative Report concluded that indeed the 2020 AGM had been conducted unfairly, and anyone with a brain could see that a) members of Toshiba's senior executive team had been trying to abuse and disenfranchise certain large shareholders, b) METI officials were helping them, and c) the Audit Committee arranged an internal investigation conducted by a law firm which appeared more interested in papering over the problem than clarifying it, things went downhill. Shareholder proxy firms ISS and Glass Lewis immediately came out recommending shareholders vote against FIVE of the members of the Toshiba-nominated slate of director candidates, including two named in the report (OTA Junji and YAMAUCHI Takashi), the Chairman of the Board (NAGAYAMA Osamu), another member of the Audit Committee (KOBAYASHI Nobuyuki), and a member of the Nomination Committee (WEISSMAN Ayako). The second largest shareholder wrote a letter to the Board, delivered on the day they held an emergency meeting to discuss the Investigative Report. That letter demanded the immediate resignation of four of those five (all except WEISSMAN Ayako). The Board responded by saying the two named in the report would not stand for re-election, that two executives would resign, and that to replace the two departing directors (former CEO KURUMATANI Nobuaki had been replaced by interim CEO TSUNAKAWA Satoshi, but FURUTA Yuki and former INED-but-not-really FUJIMORI Yoshiaki were leaving) and the two newly-leaving, one internal and three external directors would replace them, leaving the firm with 2 internals (including the CEO) and 9 external directors. Shareholders seemed unhappy at the somewhat cavalier attitude displayed by the Chairman in his remarks the next day and open letter days afterward, and more upset at the frankly dismissive attitude of the Minister for Economy Trade and Industry, KAJIYAMA Hiroshi, who first said the report was lies, then said "so what if we did?" then said, in response to the report's claim of "likely illegal actions", "we don't need to investigate."METI Head KAJIYAMA painted the tape with commentary all week, a former US ambassador to Japan came out with a letter of support for Chairman NAGAYAMA, and it turns out to be for nought.At today's AGM, Chairperson NAGAYAMA Osamu and former Audit Committee member KOBAYASHI Nobuyuki were voted out, effectively ridding the firm of the four that 3D Investment Partners wanted out. The Board was ready to sit with 9 rather than 11, and a hastily-convened meeting today was set to choose a new chairperson, who is now CEO TSUNAKAWA.But one of the newcomers George OLCOTT, nominated and approved by the AGM, has declined to take up his seat on the Board. The Board is down to eight. The acting CEO TSUNAKAWA who is, based on the open letter by previous chairman NAGAYAMA, there while a search for his replacement is conducted, is now also Chairman of the Board when independence, outsidership, and expertise are clearly needed. The Board can probably limp along this way, but this is a clear win for Effissimo and 3D and shareholders who have been upset by a clear 'tone at the top' problem under former CEO KURUMATANI, his pressure on the board and executives, messy dealings with METI, and what many view as half-hearted efforts to clean things up.

Toshiba Corp (6502 JP) held its AGM today. It did not turn out well for the home team. As discussed in With Directors Under Fire, Toshiba Axes Two, May Need Another EGM, after the Independent Investigative Report concluded that indeed the 2020 AGM had been conducted unfairly, and anyone with a brain could see that a) members of Toshiba's senior executive team had been trying to abuse and disenfranchise certain large shareholders, b) METI officials were helping them, and c) the Audit Committee arranged an internal investigation conducted by a law firm which appeared more interested in papering over the problem than clarifying it, things went downhill. Shareholder proxy firms ISS and Glass Lewis immediately came out recommending shareholders vote against FIVE of the members of the Toshiba-nominated slate of director candidates, including two named in the report (OTA Junji and YAMAUCHI Takashi), the Chairman of the Board (NAGAYAMA Osamu), another member of the Audit Committee (KOBAYASHI Nobuyuki), and a member of the Nomination Committee (WEISSMAN Ayako). The second largest shareholder wrote a letter to the Board, delivered on the day they held an emergency meeting to discuss the Investigative Report. That letter demanded the immediate resignation of four of those five (all except WEISSMAN Ayako). The Board responded by saying the two named in the report would not stand for re-election, that two executives would resign, and that to replace the two departing directors (former CEO KURUMATANI Nobuaki had been replaced by interim CEO TSUNAKAWA Satoshi, but FURUTA Yuki and former INED-but-not-really FUJIMORI Yoshiaki were leaving) and the two newly-leaving, one internal and three external directors would replace them, leaving the firm with 2 internals (including the CEO) and 9 external directors. Shareholders seemed unhappy at the somewhat cavalier attitude displayed by the Chairman in his remarks the next day and open letter days afterward, and more upset at the frankly dismissive attitude of the Minister for Economy Trade and Industry, KAJIYAMA Hiroshi, who first said the report was lies, then said "so what if we did?" then said, in response to the report's claim of "likely illegal actions", "we don't need to investigate."METI Head KAJIYAMA painted the tape with commentary all week, a former US ambassador to Japan came out with a letter of support for Chairman NAGAYAMA, and it turns out to be for nought.At today's AGM, Chairperson NAGAYAMA Osamu and former Audit Committee member KOBAYASHI Nobuyuki were voted out, effectively ridding the firm of the four that 3D Investment Partners wanted out. The Board was ready to sit with 9 rather than 11, and a hastily-convened meeting today was set to choose a new chairperson, who is now CEO TSUNAKAWA.But one of the newcomers George OLCOTT, nominated and approved by the AGM, has declined to take up his seat on the Board. The Board is down to eight. The acting CEO TSUNAKAWA who is, based on the open letter by previous chairman NAGAYAMA, there while a search for his replacement is conducted, is now also Chairman of the Board when independence, outsidership, and expertise are clearly needed. The Board can probably limp along this way, but this is a clear win for Effissimo and 3D and shareholders who have been upset by a clear 'tone at the top' problem under former CEO KURUMATANI, his pressure on the board and executives, messy dealings with METI, and what many view as half-hearted efforts to clean things up.

Toshiba Board in Disarray! Likely Need ANOTHER EGM