Toshiba’s chairman quits as nuclear losses mount
TOKYO — Toshiba, the embattled technology conglomerate, said it planned to write off more than $6 billion and withdraw from the business of building nuclear power plants as the impact of a disastrous bet on U.S. nuclear energy continued to rock a mainstay of corporate Japan.
The company also said on Tuesday that its chairman, Shigenori Shiga, would resign, ending weeks of speculation.
Its executives have come under intense scrutiny because of the financial mess, and the years of flawed business decisions that led to it. The company said it was examining whether managers had acted inappropriately when they struck a deal to buy a company at the center of the problems.
The trouble stems from Toshiba’s management of Westinghouse Electric Co., the U.S. nuclear power business it acquired a decade ago. Westinghouse faces spiraling cost overruns at nuclear plant projects in the United States, and Toshiba said on Tuesday that it would like to sell all, or part, of its controlling stake in the company. Previous efforts to offload a portion of its shares in the subsidiary have failed, however.
“If we can find the right partner, we want to move in that direction,” said Satoshi Tsunakawa, Toshiba’s president. “Every possibility is on the table.”
Toshiba warned in December that it would most likely need to declare “several billion U.S. dollars” in write-downs at the nuclear unit. On Tuesday, it put the size of the loss at about $6.3 billion, which was near the top of analysts’ estimates.
Initially, it looked as though Toshiba might postpone the reckoning altogether.
The company’s share price dropped 8 percent earlier on Tuesday after it had asked Japanese regulators to extend a noon reporting deadline for a month, to March 14.
A few hours later, it abruptly disclosed the write-down, along with its most recent quarterly results, though it said the numbers represented an updated internal assessment, not the final figures it would eventually file to stock market regulators.
Explaining its request to delay filing the official financial statements, Toshiba said it needed additional time for lawyers to examine an acquisition by Westinghouse that is at the center of the planned write-down.
In that deal, completed in 2015, Westinghouse bought a U.S. construction company that it had been using as a contractor at the nuclear plants it was building in the United States.
Toshiba’s auditors determined afterward that Westinghouse had overpaid. Delays and cost overruns at the projects, they said, meant that the construction company, CB&I Stone & Webster, was saddled with potential liabilities for which Westinghouse had failed to account.
On Tuesday, Toshiba said lawyers looking into the deal were examining whether senior managers at Westinghouse had exerted “inappropriate pressure” on subordinates who were reviewing Westinghouse’s offer for CB&I Stone & Webster.
The company did not elaborate, saying only that the managers’ actions may have circumvented “internal controls.”
Toshiba has struggled to make money in nuclear power since it bought Westinghouse for $5.4 billion in 2006.
Reactors that the company is building in the U.S. — at the Virgil C. Summer nuclear station in South Carolina and the Alvin W. Vogtle nuclear plant in Georgia — are about three years behind schedule and billions of dollars over budget.