Rocky Swift and Makiko Yamazaki

TOKYO, Reuters -Toshiba Corp shareholders voted down two competing proposals on Thursday – one from management and one backed by activist shareholders. This leaves the future direction for the troubled Japanese conglomerate in doubt.

Both the plan of management to spin-off Toshiba (OTC) and its separate call for buyouts failed to win the necessary 50% vote.

This untidy result means that there will not be an immediate end of a scandal-filled four-year battle between management, foreign activist hedge fund managers and the company’s board.

It was not surprising that there had been opposition to Toshiba’s plan to disintegrate the company. Proxy advisory firms were also involved in this fight. The outlook for 3D Investment Partners, based in Singapore, which proposed that Toshiba seek private equity buyout options or a minor investment was not as clear.

While 3D and Toshiba were the top shareholders, Institutional Shareholder Services, a proxy advisory firm, had opposed the offer. They said the proposal was “prescriptive” and too premature.

It is unclear where Toshiba’s management will go from here. However, the company plans to review its restructuring plan. Analysts also expect Toshiba Tec to be sold. This is a point-of sale system that makes copiers and point-of sales systems.

Taro Shimada from Toshiba, the new CEO, stated at the close of the extraordinary meeting that Toshiba would be “considering various strategic options”.

Toshiba’s stock ended 0.5% lower after the results.

A COMMUNITY OF ACTIVISTS FOR THE FIGHT ON

Some analysts saw these results as a setback to activist hedge fund strategies.

David Baran co-founder of Symphony Financial Partners, a fund management company. “It’s terrible for activists because they don’t have enough control to influence the voting and aren’t willing to contribute further capital.”

“They’re trapped. Because it was logical to them, they thought that they would be able to get away with the U.S.-style tactics. How did that work out? He continued.

The push to buyout the conglomerate is still on. It has the potential for solid returns for the hedge funds that invested in it during the financial crisis.

Activist shareholders intend to continue fighting to get the company to resume negotiations with private equity firms, sources close to the situation told Reuters previously on condition that they remain anonymous.

Some shareholders stated they also expect top investors or one of them to nominate representatives to the Toshiba annual shareholders meeting. The purpose is for Toshiba to seek private equity buyouts.

Toshiba met with potential private equity partners last year for a five-month strategic review.

It also walked away from advanced talks for a minority stake from Canada’s Brookfield Asset Management, sources have said, adding that the private equity firms Toshiba held talks with included KKR & Co (NYSE:) Inc and Bain Capital.

Toshiba claimed that the buyout options were too low-quality.

After criticisms of Toshiba’s flawed strategic review that led to plans for the dissolution, the focus will be on the composition of Toshiba’s board.

Paul Brough is the chairman of the five-member strategic reviewing committee and indicated that he might reconsider his position if the plan for dissolution was rejected. ISS stated in a report.

Toshiba’s management is under severe pressure by activist funds. In 2017, Toshiba sold 600 billion Japanese yen (about $5 billion) stock to many foreign hedge fund dozens during the financial crisis that arose from its U.S. nuclear energy unit bankruptcy.

The two-year old conflict between them has reached boiling point at several points. Last June a shareholder-commissioned probe found Toshiba colluded with Japan’s trade ministry – which sees the conglomerate as a strategic asset due to its nuclear reactor and defence technology – to block overseas investors from gaining influence at its 2020 shareholder meeting.