Photo/Illutration Toshiba Corp.'s logo in Kawasaki (The Asahi Shimbun)

The second-largest investor in Japan’s Toshiba Corp. on Thursday called for an extraordinary general meeting, seeking to force the company to win two-thirds support for a three-way breakup plan that has angered some major overseas shareholders.

The proposal by Singapore-based hedge fund 3D Investment Partners marks the latest in a long and acrimonious battle between the once-mighty tech conglomerate and a number of its foreign shareholders, many of them activist funds.

Toshiba is now about 30 percent-owned by foreign hedge funds, many of which doubt whether management’s plan to split the company into three businesses--one each for energy/infrastructure, electronic devices and flash memory chips--can maximize shareholder value.

The break-up plan was announced last November after a five-month strategic review following years of accounting scandals and governance issues that undermined investor confidence and saw Toshiba’s market value more than halved, to around $18 billion, from an early 2000s peak.

If 3D’s proposal for the meeting were to be accepted, it would trigger a vote that could ultimately scupper the break-up plan, a strategy that carries echoes of a similar move announced last year by General Electric Co.

3D owns more than 7 percent of Toshiba, a stake worth well over a billion dollars. In a statement, it highlighted concerns about the cost of going ahead with the split before getting a mandate from shareholders and called for Toshiba to resume its strategic review.

“There is no rationale for pursuing at great expense the separation plan without knowing whether a sufficient number of Toshiba shareholders will ultimately provide consent,” the fund said. Toshiba has previously said the plan will cost 10 billion yen ($86 million) to implement.

Toshiba said on Thursday it has received the proposal from 3D and is currently examining it. Shares in Toshiba were almost flat on Thursday morning, compared with a 2.1 percent decline in the Tokyo market.

‘EXPLORE ALTERNATIVES’

In a twist, 3D said that if an extraordinary general meeting were to be approved, it would actually vote against its own proposal that Toshiba’s statutes of incorporation should be changed to mandate the two-thirds voting support is needed for the “strategic reorganization plan.”

Instead, 3D said, the company should not approve any reorganization “without first further exploring other alternatives thoroughly.”

With its proposals, 3D is effectively trying to force the conglomerate to bring forward by more than a year a vote requiring backing from two-thirds of shareholders that is required under Japanese law. Officially, the vote is not slated to be held until the annual general shareholder meeting in 2023.

Weakened by a 2015 accounting scandal and the bankruptcy of its U.S. nuclear business, Toshiba has proposed the break-up to sharpen its focus on individual businesses.

But 3D and other shareholders have pushed for a more thorough review that would take into account potential private-equity bids.

Toshiba’s strategic review so far “failed to consider a full range of alternatives,” 3D said.

The company itself has proposed an extraordinary shareholder meeting in the January-March quarter to gauge shareholder support for the break-up plan, set to be completed by March 2024.

But details of the meeting are unclear, including the level of shareholder support it will require to continue with the plan.

One alternative to seeking a direct vote on support for the breakup plan that has been floated among Toshiba’s board is asking shareholders at the extraordinary meeting to instead vote on the reappointment of its board directors, people familiar with the matter have said.

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