Toshiba warns of $8.4B loss; that’s actually ‘good’ news
tokyo — Troubled conglomerate Toshiba on Monday delayed its earnings for a third time since January, but warned it likely lost ¥950 billion ($8.4 billion) in the justended fiscal year, with fears growing about its survival.
The latest delay comes as one of Japan’s best-known firms grapples with claims of financial misconduct at money-losing US nuclear unit Westinghouse Electric, which is sitting in bankruptcy protection.
The warning — largely linked to the bloodletting at Westinghouse — was, however, slightly better than an earlier projected net loss of ¥1.01 trillion for the year ended in March.
Toshiba twice postponed ninemonth earnings before it released unaudited results last month.
“We can’t officially disclose the earnings as they’re still being audited,” Toshiba president Satoshi Tsunakawa told a news briefing in Tokyo on Monday.
Toshiba — still recovering from a 2015 accounting scandal — has said it needed more time to probe claims of financial misconduct by senior managers at Westinghouse and to gauge the impact on its finances.
The investigation was started after a whistleblower complained that one or more executives at the US unit exerted “inappropriate pressure” on its accounting.
The series of delays have stirred fears that Toshiba could be delisted from the Tokyo Stock Exchange.
The company now faces a deadline for the end of June to file its results with Japan’s finance ministry, or face a possible end-ofJuly delisting.
But it is not clear if the firm’s shares will be yanked from the exchange even if that date is missed.
Toshiba stock, which has lost more than 40 per cent of its value since late December, rose 3.43 per cent to ¥261.8 on Monday.
“The market does not feel that the exchange is pushing toward a delisting,” Toshihiko Matsuno, chief strategist at SMBC Friend Securities, told AFP. “If that was the case, the company would have been delisted a while ago, but the reality is that it’s been put off for quite some time.”
Monday’s announcement comes as a sensitive time as Toshiba looks to sell its prized memory chip business. The plan is facing opposition from Western Digital, which jointly runs Toshiba’s key chip plant in Japan. The Japanese firm is the world’s number two supplier of memory chips for smartphones and computers, behind South Korea’s Samsung.
Numerous reports have suggested that Taiwan’s Hon Hai Precision, better known as Foxconn, is offering some ¥3 trillion for the unit. Google and Amazon as well as US private-equity firm Silver Lake Partners and American chipmaker Broadcom are reportedly among the other interested suitors.
Any foreign buyer would need to pass a Japanese government review, given Japan’s concerns about losing a sensitive technology and questions about security around systems already using Toshiba’s memory chips. They are widely used in data centres as well as smartphones and computers.
The Financial Times reported that Tokyo is ready to guarantee up to ¥900 billion in bank loans if Toshiba chooses a domestic suitor or one with strong Japanese links.
“It would be no surprise if Japanese authorities take action to prevent Toshiba’s memory chip technology from being transferred overseas,” said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo. “The technology is quite attractive and lucrative.”
Toshiba’s huge losses come after its reputation was badly damaged over separate revelations that top company executives had pressured underlings to cover up weak results for years after the 2008 global financial meltdown. —