Toshiba Chairman Quits After $6.3-B Nuclear Writedown
Tokyo: Toshiba, the embattled technology conglomerate, said it would take a financial hit of more than $ 6 billion and its chairman would step down as the impact of its disastrous bet on American nuclear power continued to rock an icon of corporate Japan. The announcement of the planned write-down and resignation, which came after a day of uncertainty on Tuesday as Toshiba equivocated on whether it would release the news, reflected intense pressure on Toshiba executives over the writedown — and the business decisions that led up to it. Company officials said Tuesday that they were examining whether managers had bypassed internal controls when they struck a deal for a business at the center of the problems. The hits come from Toshiba’s investment in Westinghouse, the American nuclear power company, reflecting spiraling cost overruns at nuclear plant projects in the United States. In December, Toshiba said it would most likely have to declare “several billion US dollars” in writedowns at the nuclear unit.
On Tuesday, it put the size of the Westinghouse write-down at 712.5 billion yen, or about $ 6.3 billion. Toshiba also said its chairman, Shigenori Shiga, would resign to take “management responsibility for the loss”. The figure announced on Tuesday was at the high end of the range expected by analysts, who had suggested the loss would be between $4 billion and $7 billion. Initially, it looked as though Toshiba might postpone the reckoning altogether.