Junko Fujita and Makiko Yamazaki

TOKYO, Reuters – Tokyo Corp announced Tuesday that Satoshi Tsunakawa, Chief Executive of Toshiba Corp was stepping down. This sudden resignation comes after internal resistance to controversial restructuring plans by the industrial conglomerate.

The original plan of Toshiba (OTC) to break up the conglomerate in three companies was heavily criticised by shareholders from foreign hedge funds. Two sources close to the matter say that a modified plan was presented this month, which called for the division of the conglomerate into two businesses and the sale or transfer of some other companies. However, there was opposition within the company.

These sources weren’t authorized to speak with media. They declined to be named.

Toshiba refused to answer questions about internal resistance, but stated that it believes the plan for reorganization is the best choice.

Toshiba announced that Taro Shimada, the former executive of Siemens AG (OTC), will take over as interim CEO effective Tuesday.

Mamoru Hazawa, corporate senior vice president, and member of the board, will also be stepping down. Goro Yanase (head of Toshiba’s elevator company) will become interim chief operational officer.

It said that the board would continue to monitor the performance of the business and its execution.

Tsunakawa, who had previously resigned as CEO on an interim basis but had stated that he didn’t expect to be there long-term, was surprised by the timing of his announcement.

Toshiba spokesperson stated that company has made new appointments as it wants shareholders to know who is leading the company. This will come before a special general meeting on March 24 which seeks initial approval from shareholders for the revised plan.

The proposal by a large shareholder that Toshiba investigate other options and seek out buyouts from private equity companies will be voted on by shareholders.