Toshiba warns of huge losses in US nuclear power unit

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Báo Đầu Tư English - 4 month(s) ago 4 readings

Toshiba warned Tuesday it was on track to book a $6.2 billion writedown in its US nuclear power business, prompting its chairman to resign as it hinted at a fresh accounting scandal.

The Japanese industrial giant said that lawyers and an independent auditing firm were probing an acquisition by its US atomic division Westinghouse Electric, just hours after Toshiba missed a deadline to publish its financial results.

A whistleblower had complained that Westinghouse executives exerted "inappropriate pressure" over accounting at the firm, Toshiba said.

The revelation comes less than two years after Toshiba -- one of Japan's best-known firms which employs about 188,000 people globally -- was hammered by an embarrassing profit-padding scandal.

Its Tokyo-listed shares tumbled 8.0 percent to end Tuesday's session at 229.8 yen ($2).

The stock sell-off started in the morning after Japan's Nikkei business daily said Toshiba would issue a warning to shareholders that its future is in jeopardy.

The value of the company's shares has been sliced in half since late December, when Toshiba first flagged huge losses in its US atomic unit.

The losses accelerated after Toshiba failed to report its results at midday, as scheduled, and later said it had requested a one-month extension for submitting earnings to market regulators.

It now has until mid-March to release earnings for the April-December period.

It did, however, issue a grim preliminary earnings forecast.

Toshiba warned it was on track to report a net loss of 390 billion yen ($3.4 billion) in the current fiscal year to March, as it faced a huge writedown topping 700 billion yen at Westinghouse.

The firm also said its chairman Shigenori Shiga would resign from his post but stay with the company -- a common act of contrition at scandal-hit Japanese firms -- as it probes Westinghouse's purchase of a US nuclear services firm.

- Stock selloff -

Toshiba once touted its overseas nuclear business as a future growth driver, filling a hole left after the 2011 Fukushima crisis slammed the brakes on new atomic projects in Japan.

But on Tuesday it confirmed speculation it would dramatically reduce its nuclear ambitions overseas and stop building new atomic power plants.

Toshiba added that it would continue making equipment used in nuclear plants.

It has approached South Korean utility Korea Electric Power Corp about buying part of Toshiba's stake in British nuclear joint venture NuGeneration.

The engineering conglomerate, which makes everything from trains to memory chips, is undergoing a major restructuring.

It has already sold its medical devices unit to camera and copier maker Canon and most of its appliance business to China's Midea Group.

It is also moving to spin off its prized memory chip business, and said some possible buyers had stepped forward.

"We have received offers," chief executive Satoshi Tsunakawa told a press briefing Tuesday.

"We're not necessarily fixated on keeping a majority stake in that business - all options are on the table," he added.

In 2015, Toshiba reported multi-billion-dollar losses following the disclosure of a scandal that saw bosses for years systematically push subordinates to cover up weak financial results.

At that time Toshiba delayed its earnings announcements more than once as it grappled with the crisis that laid bare serious problems of corporate governance.

Source AFP

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