Toshiba shareholders blast $18bn chip sale
CHIBA, Japan: Toshiba’s president yesterday apologized “sincerely” over the $18-billion sale of its prized memory chip business, as shareholders demanded answers over the deal seen as pivotal to the survival of one of Japan’s bestknown firms.
Bowing deeply at the start of a tense shareholders’ meeting, Satoshi Tsunakawa said: “We sincerely apologize for causing problems and worry.” More than 600 investors poured into the meeting as they voted in favor of the sale to a consortium led by US investor Bain Capitalwhich includes US tech giants Apple and Dell as well as South Korean chipmaker SK Hynixafter months of wrangling.
Angry jeers rang out from some stockholders who had little choice but to agree to unload the division so the cash-strapped company can plug massive losses at its US nuclear division, Westinghouse Electric. Tsunakawa pledged to finish the sale by the end of March 2018 and stressed: “We will continue to have honest management, and improve our internal governance.”That pledge did not sit well with one 77-year-old pensioner who owns Toshiba stock, which has plunged about 25 percent since the losses were made public in late December. “I cannot believe what the executives are saying about turning the company around,” he told AFP. “They all look smart and are eloquent. I wonder if they knew about the losses at Westinghouse years ago.” Former Toshiba employee Masayuki Sakurai said the firm’s top brass was evasive about what would happen if the planned sale were to fall through.
“It’s still not clear if the memory chip sale will be done by March and they couldn’t give us a clear answer on what would happen if it was unsuccessful,” Sakurai said. “That’s worrying.” The chip unit brought in around a quarter of Toshiba’s total annual revenue and is the crown jewel in a vast range of businesses ranging from home appliances to nuclear reactors. Toshiba, the world’s number-two chipmaker behind Samsung, narrowly averted a delisting this year, but it still faces the humiliating prospect of being yanked from Japan’s premier stock exchange if the sale does not raise enough money. And some investors had doubts about whether things would change at the firm, which was recovering from a 2015 accounting scandal when the huge US losses were made public. On Monday, the firm said it would post a 110 billion yen ($970 million) net loss in the current fiscal year because of a tax bill linked to the massive sale. — AFP