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Toshiba Split Proposal Dealt Blow as Proxy Firm Rejects Plan

Morning commuters near the Toshiba Corp. headquarters in Tokyo.

Morning commuters near the Toshiba Corp. headquarters in Tokyo.

Photographer: Soichiro Koriyama/Bloomberg
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Toshiba Corp.’s proposal to split into two companies has been dealt a blow after a prominent shareholder advisory firm and largest stockholder came out against the plan. 

Institutional Shareholder Services Inc. urged investors in the Japanese conglomerate to reject the proposal, it said in a report dated March 9. Activist investor Effissimo Capital Management Pte, which holds a roughly 10% stake in Toshiba, also spoke out against the plan on Thursday, saying that such a split would be irreversible and could be detrimental in the longer term.