Toshiba’s chaos deepens
The chaos at Toshiba deepened this week with the chairman resigning and the Japanese corporate giant announcing a US$6.3 billion loss from its US nuclear business.
Analysts are now speculating that Toshiba, which employs almost 200,000 people in Japan and has significant investments in the US, may have to file for bankruptcy.
“This is one of Japan’s historic corporations and it’s very important to the Japanese economy, so this could be very significant for Japan,” said Tom O’Sullivan, a Tokyobased energy analyst.
“It would even impact Japan’s sovereign credit rating if there’s a knock-on effect.”
The news came a day after government statistics showed the Japanese economy grew by an anaemic 0.2 per cent in the three months to December, the third consecutive quarter that growth in the world’s third-largest economy had slowed.
Toshiba executives were due to deliver the company’s quarterly earnings announcement yesterday — the deadline for the Tokyo Stock Exchange rule to report earnings within 45 days — but failed to show up.
Instead, the company said it was “not ready” to make the announcement and asked for another month to file.
Then, after the stock market closed, Toshiba said it would take a US$6.3b ($8.8b) hit related to Westinghouse’s acquisition in December of Stone & Webster, a nuclear construction business, from Chicago Bridge & Iron.
Toshiba owns a majority stake in Westinghouse, which is a Pennsylvania-based nuclear power company.
Toshiba’s chairman, Shigenori Shiga, would step down to take responsibility for the losses, the company said.
“I apologise from the bottom of my heart for causing such major troubles for shareholders and investors,” said Toshiba president Satoshi Tsunakawa when announcing the news. Tsunakawa said Toshiba was considering selling its memory chip business to try to staunch the bleeding. Toshiba, which makes products as diverse as televisions and nuclear reactors, has had a rocky few years.
In 2015, it was found to have exaggerated its profits, leading to wide restructuring and asset sales. The company has also been trying to deal with huge cost overruns at its nuclear plants in Georgia and South Carolina. Although it says it will finish building those reactors, its has curtailed expansion plans in Britain and elsewhere.