By Jarrett Banks and John Jannarone

Proxy advisor Glass Lewis became the second major proxy advisor to recommend shareholders vote in favor of an investigation into allegations that investors were pressured ahead of last year’s annual general meeting.

Institutional Shareholder Services Inc. (ISS) made its recommendation earlier this week. The vote about the proposed independent investigation will take place at an extraordinary shareholders’ meeting on March 18.

In December, activist fund Farallon Capital, which owns a 5.37% stake, asked the conglomerate to convene an extraordinary general meeting of shareholders to seek approval before the company can make significant changes to the Toshiba Next Plan. Farallon said it was deeply concerned that Toshiba suddenly announced a growth strategy that was materially different from the plan already in place.

In its report, Glass Lewis noted that “Farallon’s case here is well-rounded” and is “comprehensive and analytically persuasive.”

“Farallon fairly and effectively highlights that Toshiba’s revamped oversight team — entirely separate from the failings of prior boards — has largely foundered, leading to subpar shareholder returns and a depressed valuation, neither of which we would expect to improve to the extent there is ambiguity around the Company’s strategic and financial direction,” Glass Lewis wrote.

Neither Toshiba nor Farallon responded to emailed requests for comment from CorpGov.

“Glass Lewis’s report definitively supports our view that Toshiba modified its capital policy in November 2020 and shareholders should insist on accountability at Toshiba,” Farrallon wrote in a statement. “In the absence of credibility and trust, Toshiba’s stock price will continue to flounder.”

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