Tension at Toshiba erupts into public as directors trade barbs

The rift is the latest in a long-running crisis that has seen management and shareholders locked in a bitter dispute over the future of the company.

Tension at Japan's Toshiba Corp erupted into a public row on Monday as two of its external directors traded criticism over governance and the nomination of hedge fund executives to the conglomerate's board.

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The rift is the latest in a long-running crisis that has seen management and shareholders locked in a bitter dispute over the future of the company, once one of Japan Inc's prized assets. It could work to undermine investor confidence in the board, just ahead of an annual general meeting.

On Monday external director Mariko Watahiki took aim at her colleague Raymond Zage saying he raised concern about governance at Toshiba when he broke with the board's stance in March and came out in favour of a shareholder proposal that the company solicit buyout offers from private equity.

Watahiki's comments were initially made in an annual business report released on Monday, and echoed by another external director, Katsunori Hashimoto. Zage's move "damaged shareholder confidence in the board and caused concerns about corporate governance", they were quoted as saying in the report.

Zage defended his actions in a statement to Reuters, saying the criticisms were misleading and that his actions had received a positive shareholder response.

Separate company documents also confirmed that Watahiki had objected to two nominations supported by the board. Reuters reported on Friday, citing people familiar with the matter, that Watahiki had objected and that the company, in a rare move, would make her objections public.