Toyota shareholders demand vote against chairman Toyoda as automaker embroiled in testing scandal

TOKYO (AP) — Toyota’s chairman Akio Toyoda will be facing some disgruntled shareholders this week, as two major proxy groups demand a vote against keeping the grandson of the founder on its board.

The vote expected at the June 18 annual shareholders meeting comes after Toyota apologized recently over fraudulent certification tests for vehicles, a major embarrassment for a company that prides itself on a reputation for excellent quality. The raft of problems at Japanese automakers including Toyota are said not to involve any safety problems and no recalls were announced. But Toyota suspended production of three models produced by group companies in Japan.

Toyota’s stock prices had tripled over the last five years to nearly 3,800 yen ($24) before cascading downward amid its latest troubles. Its shares are now trading at above 3,000 yen ($20) — a loss of about 3 trillion Japanese yen ($18 billion) in market value.

Institutional Shareholder Services, majority owned by the German capital market company Deutsche Borse Group, which advises investors, said in its proxy report that Toyoda “should be considered ultimately accountable.”

It noted his promises for change did not involve reshuffling of the board. While Toyota said it plans to communicate better with workers on the ground, that likely wasn’t enough to prevent a recurrence of problems with cheating on testing, ISS said.

“The company’s propensity to preserve its corporate culture is in fact suspected, and Toyoda should be held accountable for that,” it said.

ISS is not opposing appointments of other board members, including Toyota Chief Executive Koji Sato, who took up his post in 2023.

The past year has brought a flurry of scandals involving improper checks on vehicles,