Photo/Illutration Osamu Nagayama, who chairs Toshiba Corp.’s board of directors, at an online news conference on June 14 (Asahi Shimbun file photo)

Toshiba Corp.’s biggest shareholder Effissimo Capital Management described the conglomerate’s board as “ineffective” in a statement on Thursday, and said it had failed to resolve governance and compliance shortcomings at the company.

The statement marks the first time that Singapore-based Effissimo has made its views known since a shareholder-commissioned investigation revealed Toshiba colluded with the Japanese government to block foreign shareholders from having influence.

Effissimo, which holds about 10% of Toshiba’s shares, said the board’s decision to remove only two board director nominees in response to the investigation was a reminder that it was unwilling to hold the board members accountable.

Toshiba was not immediately available for comment.

Shareholder advisory groups Institutional Shareholder Services Inc. and Glass Lewis continue to recommend that shareholders should vote against the re-appointment of Board Chairman Osamu Nagayama and certain other current directors.

3D Investment Partners, Toshiba’s second-largest shareholder, has also called for the resignation of Nagayama.

Effissimo’s statement, first reported by the Financial Times, did not call for a resignation of specific directors, but said it would “continue to hold the board members accountable when necessary.”

The independent investigation last week alleged that the company’s management colluded with Japan’s trade ministry to prevent foreign investors from gaining board influence, in what 3D Investment called the world’s worst corporate scandal in a decade.

Meanwhile, the chairman of Toshiba's board of directors, facing calls to resign amid a corporate governance scandal, said he may step down after revamping its board and appointing a new CEO, according to the Wall Street Journal.

An independent investigation has alleged that Toshiba management colluded with Japan's trade ministry to block foreign investors from gaining board influence, reviving concerns about Japanese corporate governance and prompting calls for Board Chairman Osamu Nagayama to resign.

"These are the two major tasks if I remain as a board member and the chairperson of the board," Nagayama was quoted as saying in the Journal interview.

“When I see the whole thing set in the right order, it’s an appropriate time I consider myself to resign.”

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