Toshiba re­moved from watch­list at Tokyo Stock Ex­change

Muscat Daily - - BUSINESS -

Tokyo, Ja­pan - The Tokyo Stock Ex­change said it re­moved Toshiba Corp from its watch­list for delist­ing af­ter see­ing bet­ter in­ter­nal con­trols and ef­forts to im­prove cor­po­rate gov­er­nance.

Toshiba has made progress with its book­keep­ing since an ac­count­ing scan­dal in 2015 and the dis­clo­sure of multi­bil­lion-dol­lar losses in its nu­clear busi­ness in De­cem­ber, the ex­change said in a state­ment on Wed­nes­day.

The com­pany still has neg­a­tive share­hold­ers eq­uity and could be delisted if it isn’t able to meet list­ing re­quire­ments, the ex­change said.

Toshiba signed an agree­ment on Septem­ber 28 to sell its flash mem­ory chip busi­ness to a group led by Bain Cap­i­tal for about US$18bn, in an ef­fort to reach pos­i­tive share­holder eq­uity.

Toshiba, which was de­moted to the se­cond sec­tion of the ex­change in Au­gust, needs to com­plete the deal by March. While the ex­change’s de­ci­sion on Wed­nes­day was mainly due to im­proved con­trols and ef­forts to bol­ster cor­po­rate gov­er­nance, it’s also a sign that fi­nan­cial au­thor­i­ties ex­pect the Tokyo-based com­pany’s bal­ance sheet to re­cover.

The Bain con­sor­tium in­cludes ma­jor tech­nol­ogy play­ers Ap­ple Inc, Dell Inc, SK Hynix Inc and Ja­pan’s Hoya Corp, while Toshiba it­self will main­tain a stake, the com­pany said when it an­nounced the mem­ory chip deal.

The to­tal value of the trans­ac­tion may change de­pend­ing on cap­i­tal ex­pen­di­tures. The deal is aimed at keep­ing con­trol of an im­por­tant busi­ness in Ja­pan, while se­cur­ing the fund­ing needed to help Toshiba re­pair its dam­aged bal­ance sheet. Toshiba ex­pects the deal to close by March 31.

Sep­a­rately, ear­lier on Wed­nes­day proxy ad­vi­sors Glass Lewis & Co and In­sti­tu­tional Share­holder Ser­vices Inc called Toshiba’s gov­er­nance into ques­tion and rec­om­mended that in­vestors vote against ap­prov­ing earn­ings re­sults at the share­hold­ers meet­ing later this month.

The com­pany hasn’t been able to se­cure an un­qual­i­fied en­dorse­ment from its au­di­tor, the two US firms said in sep­a­rate re­ports, and rec­om­mended vot­ing against Pres­i­dent Satoshi Tsunakawa’s renom­i­na­tion to the board.

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