Toshiba has finally appointed Nobuaki Kurumatani as its new CEO.
Kurumatani will assume office in April 2018. Regarded as well-connected with politicians and bureaucrats, Kurumatani currently heads the Japanese arm of private equity firm CVC Capital Partners and before that was an executive at one of Toshiba’s main lenders, Sumitomo Mitsui Financial Group (SMFG).
While at the bank, he was involved in arranging a government-led bailout plan for Tokyo Electric Power after the 2011 Fukushima earthquake and tsunami disaster.
“His appointment is designed to deal with the activist shareholders, because there is no one at Toshiba with the experience to tackle this,” said a financial source familiar with matter, declining to be identified, as he was not authorized to speak to media.
“Any great company with a long history will go through some hard times,” Kurumatani, said at a briefing in Tokyo. “I think that it’s in the midst of difficulties that you can most clearly see the path forward.”
Toshiba shares rose 1.9 percent to close at 318 yen in Tokyo. The stock is little changed this year, after climbing 12 percent in 2017.
“This is good news from the point of view of debt investors, because someone from a banking background is likely to be more cautious when it comes to making bold investments,” said Yoshihiro Nakatani, a senior fund manager at Asahi Life Asset Management Co.
As CEO, Kurumatani’s first task is to ensure the smooth sale of its $18 Billion chip unit – the world’s No. 2 producer of NAND memory chips and the source of most of its earnings – to a Bain-led consortium. The sale, which will see Toshiba retake 40 percent of the unit, is aimed at putting the conglomerate back on a firmer footing after a year of crisis stemming from huge losses at its U.S. nuclear unit, and Kurumatani declared his first priority was bolstering the conglomerate’s finances.
“Firstly, the issue is capital, to help capital recover quickly and return to global competition,” he told a news conference.
Kurumatani will succeed Toshiba’s current CEO, Satoshi Tsunakawa. Tsunakawa will become Chief Operating Officer and be in charge of day-to-day operations.