Toshiba shareholders on Thursday voted against its plan to spin off the devices unit, but a separate motion backed by activist shareholders that called for the conglomerate to solicit buyout offers also failed to gain sufficient support.
The result of the extraordinary general meeting appears to leave Toshiba with no immediate clear direction, still mired in a four-year scandal-filled battle between management and foreign activist hedge funds.
The proposal to seek private equity buyout offers or a minority investment was made by Singapore-based 3D Investment Partners, Toshiba's No.2 shareholder and was also supported by top shareholder Effissimo Capital Management and No. 3 shareholder Farallon Capital Management.
Each proposal needed 50% of the vote to pass. A breakdown of the voting was not immediately available.
When asked last month what would happen if the break-up plan failed to pass, then chief executive Satoshi Tsunakawa only said the company would consider all options.
Some shareholders have told Reuters they expect one or two top investors nominate their own representatives for the board at Toshiba's annual shareholders meeting in June to make the company solicit private equity buyout offers.
A private equity buyout could allow activist investors that bought into the crisis-ridden conglomerate over the last six years to make an exit with solid returns.
Toshiba previously rejected calls to seek buyout bids arguing that potential offers suggested so far were insufficiently compelling and would raise concerns about the impact on its business and staff retention.
The make-up of the board could also shift amid criticism that it conducted a flawed strategic review that led to the plans to break up the company.
Paul Brough, the chair of the five-member strategic review committee, has indicated he would reconsider his position if the breakup plan was voted down, proxy advisory firm Institutional Shareholder Services (ISS) said in a report.