Toshiba facing end of the road as earnings report delayed, chairman Shigenori Shiga to step down
Updated
The Japanese company Toshiba may have reached the end of the road.
The company was supposed to deliver news to the Tokyo Stock Exchange on Tuesday about a one-off loss relating to a US subsidiary, but has delayed the announcement for another month — it does not bode well.
The market expects the loss to be close to $US6 billion, which could threaten the company's future.
Toshiba's projected losses were so great that the company's chairman resigned.
Shigenori Shiga will step down from the board but stay on as an executive.
When Australians hear the name Toshiba, they think of TVs and household appliances, but the Japanese giant is no longer known for its electronic products — they make up a tiny percentage of its business.
It is now a diverse company, with interests ranging from nuclear power to computer chips, and it is the nuclear power division that may have sent the rest of the company into meltdown.
Toshiba manufactured one of the reactors in Japan's crippled Fukushima Daiichi nuclear plant, which was hit by an earthquake and tsunami in March 2011, and has since been involved in the clean up.
When the company announced in December it had to announce a one-off loss relating to its nuclear arm, the shares lost about 45 per cent of their value.
With the announcement of a further delay, the stocks slumped again, this time losing more than 9 per cent.
Toshiba has announced an inquiry into the management of its US subsidiary Westinghouse Electric — alleging management were giving improper pressure inside the company over the accounting process.
The company also delayed its earning reports in 2015, when it faced a huge fallout over a $US1.2 billion accounting scandal.
That incident saw eight high-level executives and directors, including the president and his predecessor, quit after an independent report found senior management was complicit in a years-long scheme to pad company profits.
Topics: business-economics-and-finance, corporate-governance, nuclear-energy, information-technology, japan
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