TOKYO: A Toshiba Corp external board member says the company’s plan to appoint two directors representing activist investors lacks fairness and balance, opposing their election in a shareholder vote this month.

       Mariko Watahiki, a former judge who became a Toshiba board member last year, spoke out against the proposed election of two director candidates from Elliott Management Corp and Farallon Capital Management, saying that if they were appointed, activists would take up too much of the board.

       Toshiba announced a slate of 13 proposed directors last month ahead of its shareholder meeting scheduled for June 28.

       “Toshiba has many types of shareholders, such as hedge funds, institutional investors and individual investors, who would seek profits from their investment in different ways,” Watahiki said in an interview with Bloomberg News.

       “If we take people from just one specific group, it’s impossible to avoid conflicts of interest.”

       It’s an unusual show of public opposition to a board decision by an outside director at one of Japan’s most famous companies. It highlights the tensions that exist within Toshiba as the conglomerate considers its future, including whether to sell itself to private equity and go private.

       Watahiki said she wanted to let people know the board isn’t unanimously recommending the candidates.

       Directors linked to activists would pursue short-term profit, she said.

       Watahiki pointed out that Raymond Zage, another Toshiba director who is nominated to continue in the role, also previously worked for Farallon.

       Farallon didn’t immediately respond to a request for comment.

       A representative for Elliott didn’t immediately comment.

       Zage said Toshiba’s nomination committee, which he chairs, went through an extensive review of candidates over a long period.

       He said he was specifically asked by the committee and the board to identify shareholder representatives to serve as directors.

       The objective of the process was to help rebuild trust with stock holders, he said.

       Toshiba said last week it received eight offers to buy out the conglomerate and two proposals for capital and business alliances as part of its process to solicit strategic options for its future.

       While the company didn’t disclose the bidders, Bain Capital, Blackstone Inc and CVC Capital Partners are among buyout firms that were weighing bids, Bloomberg has reported.

       Toshiba named Eijiro Imai, a managing director at Farallon Capital Japan, as one of its proposed director candidates, while Nabeel Bhanji, who hails from Elliott, is another.

       Toshiba’s leaders had long fought against the idea of privatisation, with former chief executive officer Satoshi Tsunakawa laying out five reasons why it would be the wrong decision just in February of this year.

       His management team instead argued the company should be split in two, but investors voted down that approach.

       Watahiki said it’s reasonable for Toshiba to have some board representation from its activist shareholders, but the balance isn’t right with the current candidate slate.

       Toshiba should give more board seats to people who have a deeper understanding of its businesses, she said. — Bloomberg