Toshiba investigators defend report, say Japan official stonewalled

© Reuters. FILE PHOTO: The logo of Toshiba Corp. is seen at the company's facility in Kawasaki, Japan February 13, 2017. REUTERS/Issei Kato

By Makiko Yamazaki

TOKYO (Reuters) -Investigators who revealed Toshiba (OTC:TOSYY) colluded with Japan's trade ministry to pressure foreign shareholders on Thursday defended their inquiry against government criticism.

Takao Nakamura, one of the three lawyers who conducted the shareholder-commissioned investigation, said they had done their best to include the viewpoint of a key figure even after they were stonewalled by a ministry official.

"We, as investigators, would argue against claims that question the reliability of the report," Nakamura, a partner at Wadakura Gate Law Office, told Reuters, adding his view was shared by his co-investigators.

"It was compiled in a way that various criticism can be countered," Nakamura said in the first response by the investigators to criticism from Japan's government.

Their inquiry found that Hiromichi Mizuno, a board member of Tesla (NASDAQ:TSLA) and until recently an adviser to Japan's Ministry of Economy, Trade and Industry (METI), effectively influenced Harvard University's endowment fund to abstain from voting at Toshiba's shareholder meeting last year.

Mizuno has told Reuters he did not pressure Harvard and has called on the fund to "set the record straight".

Japan's trade minister has said the probe did not reflect Mizuno's comments from his interview with the investigators, adding this was arranged and attended by METI officials.

Nakamura said investigators were stonewalled by a METI official when they tried to submit a draft summary of Mizuno's comments for his review.

Mizuno did not respond to a Reuters request for comment.

A senior METI official, Masayoshi Arai, said investigators presented a summary of Mizuno's comments despite being asked to show how his statements would be used in the report.

They also included comments they had been asked by Mizuno not to use, Arai said.

"The investigators didn't provide anything that Mr. Mizuno had asked for," he added.

WATERSHED

The independent probe has been seen as a watershed moment for corporate governance in Japan. Governance experts and foreign investors say that its scope and detail would have been unthinkable a few decades ago.

It was only made possible after foreign activist investors ultimately secured enough shareholder votes at an extraordinary meeting in March to commission an inquiry.

The investigators interviewed Mizuno after agreeing to show him a draft of his comments prior to publication, Nakamura said. They brought a draft summary to a METI official to be forwarded to Mizuno, and asked for guidance on what changes were wanted.

But the official objected to the draft, saying it included statements Mizuno had asked to be excluded, Nakamura said.

Ultimately investigators were not able to include Mizuno's comments, Nakamura said. They then aimed to reflect Mizuno's views by others means, including quoting from his Twitter account when he responded in December to a Reuters story about his alleged role in Toshiba, he said.

Arai, who is director-general for policy planning and coordination at METI, said that the investigators did not provide what they had agreed to, adding that their summary included personal exchanges with the Harvard fund, which Mizuno had told them not to use.

Arai said METI did not reject the draft. He said the ministry later asked if it could pass the draft summary on to Mizuno, but investigators did not respond.