Profit scandal hurts Toshiba

TOSHIBA shares plunged to their lowest level in nearly seven years yesterday after it warned of a $4.5-billion annual loss and layoffs following an embarrassing profit-padding scandal, dragging Tokyo’s benchmark stock index lower.

Crisis-hit Toshiba said after markets closed on Monday it would book the record loss and cut thousands of jobs, with the stock dropping nearly 10% that day after reports of the shortfall.

The shares tumbled another 12.28% yesterday to finish at 223.5 yen.

Toshiba’s stock is worth less than half its value before revelations earlier this year that executives pressured underlings to falsely inflate profits to hide poor results.

In other trading, McDonald’s Japan dropped 7.84% to 2 712 yen as the Nikkei business daily said its US parent wanted to sell as much as one-third of its shares in the struggling unit.

The division has been hit by losses and food contamination scandals.

Tokyo’s lacklustre performance yesterday came after the three main US stock indexes booked solid gains, shrugging off another new multi-year low in oil prices.

“Ahead of the holidays, it’s hard to expect to receive a decent return for taking risk,” SBI Securities Co senior market analyst Nobuyuki Fujimoto said.

“Japanese stocks are no longer relatively expensive, so I wouldn’t expect big declines. But they’re also unlikely to move much higher.” — AFP