Toshiba plunges into loss after $6.3-bn nuclear business write-down
14 February 2017
Shigenori Shiga, a former Westinghouse boss brought in as chairman of scandal-hit Toshiba last year after a $1.3 billion accounting scandal in 2015 shook up Toshiba 's upper ranks, finally opted himself out after reporting a $6.3 billion loss at Toshiba's nuclear unit.
After delaying financial results amidst confusion, Japan's Toshiba finally said it expected to book a $6.3-billion hit on its US nuclear unit write-down, which could wipe out its shareholder equity and drag the group to a full-year loss.
Toshiba said it expected to book a ¥499.9 billion ($4.4 billion) net loss for the nine months to December, and a ¥390 billion net loss for the full year.
It also ended 2016 with negative shareholder equity due to the ¥712.5 billion nuclear write-down - a charge that was first flagged in December last year.
Toshiba has failed to release its earnings on schedule and is yet 'not ready' with the figures. The company said it needed more time to probe its Westinghouse nuclear business after internal reports uncovered potential problems.
The figures eventually released were numbers that have yet to be approved by its auditor and Toshiba cautioned investors that a major revision was possible.
Fully audited numbers are now not due till 14 March after the firm was granted a reprieve for its formal filing by Japanese regulators.
Toshiba also said in a statement it could push harder to raise capital, including selling a majority stake in its memory chip arm. Previously, it had sought to sell just under 20 per cent of its prized business.
Shares in the group slid 8 per cent, putting the company's market value at ¥973 billion ($8.6 billion), less than half its value in mid-December. Just under a decade ago, the firm was worth almost ¥5 trillion. (about $44 billion)
Toshiba, which earlier sought at least a partial exit from ventures in Britain and India, said it would completely withdraw from nuclear plant construction overseas.
In a separate statement earlier, Toshiba had outlined concerns at its Westinghouse business, the US nuclear unit bought from the UK government a decade ago.
Internal reports, Toshiba said, suggested controls at Westinghouse had been "insufficient" and it needed to look into whether senior managers at Westinghouse exerted "inappropriate pressure" during discussions over a US deal to buy the company at the heart of its cost overruns, it said.
"We judged that it would take about a month for external lawyers ... to conduct these further probes and for the independent auditors to review the results," Toshiba said.
Toshiba's shares dropped the most in almost a month after it failed to release earnings for the nine months through December at noon Tokyo time, as it had previously pledged. Instead, it issued a statement saying that it needed another month to complete an auditor review of the results.