Sony's Hirai faces attack from activist 'old boys': Sources

Former executives critique CEO's approach
By Ritsuko Ando and Reiji Murai
|hrreporter.com|Last Updated: 04/24/2015

TOKYO (Reuters) — A group of former top Sony Corp executives has delivered an unusually blunt critique to the firm's chief executive Kazuo Hirai, accusing him of losing sight of innovation by focusing on cost-cutting.

At a meeting at Sony's Tokyo headquarters last Thursday, five former executives, including PlayStation creator Ken Kutaragi, took Hirai to task for failing to encourage the kind of creativity that helped produce iconic gadgets such as the Walkman, according to three people familiar with the meeting.

This sharp, behind-the-scenes criticism by alumni, known in Japan as "old boys" who can retain influence long after retirement, represents a new test for Hirai just as he has fended off pressure from activist investor Daniel Loeb to sell off part of Sony's entertainment business.

The move threatens to undermine him at a time when he is trying to show investors and employees that he can lead Sony back to growth after the restructuring that cut around 15,000 jobs.

"Sony is like a ship that has set sail in the stormy weather of the electronics business, led by a captain who's using a flawed nautical map," Tamotsu Iba, a former Sony CFO and vice chairman, said in a letter sent to board members and management ahead of the meeting, which he attended.

"He doesn't have the sensibility or intellect to notice it's wrong. Do board members, who should be in a position to supervise the captain, not notice? Are they tolerating it, not willing to point it out?"

A copy of the letter was reviewed by Reuters.

Iba's letter, which was a follow-up to a similar letter he sent in January, did not directly call for Hirai's removal but questioned his abilities as CEO and demanded hiring more engineers and appointing fewer outsiders to the board of directors.

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