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Toshiba chairman resigns as company shares dive after delaying financial results

Toshiba chairman resigns as company shares dive after delaying financial results”

After pulling the plug on its latest financial statement, Toshiba has now seen its chairman Shigenori Shiga step down over disastrous cost overruns in its nuclear division that have seen the company in a tailspin since a year ago.

The loss comes from the write-down of goodwill of CB&I Stone & Webster, a USA -based nuclear plant builder Toshiba acquired through US subsidiary Westinghouse Electric in late 2015.

In April-December 2015, Toshiba reported a 479 billion yen ($4.2 billion) net loss due largely to an embarrassing profit-padding scandal, in which bosses for years systematically pushed subordinates to cover up weak financial results.

Toshiba said Shigenori Shiga, its chairman, will step down from the board, effective Wednesday, but stay on as a Toshiba executive.

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The losses have gotten so big that they could topple a company whose roots go back to 1875, the dawn of Japan's modern era.

SCE&G is the primary subsidiary of SCANA Corporation, which announced that it will discuss the situation during its February 16 earnings call and "will take into account the relevant information disclosed by Toshiba" on February 14.

Toshiba paid $5.4 billion for Westinghouse in 2006, anticipating a nuclear-power renaissance that never came.

Toshiba's chip business, predominantly the manufacturing of NAND flash memory for Western Digital and others, is one of the few profitable businesses in Toshiba's portfolio. Toshiba's construction of plants in China also has been delayed.

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However, Toshiba today (Feb. 14) announced the anticipated write-down on its nuclear engineering business at $6.3 billion.

"We have become increasingly reliant on the decisions of foreign companies whose interests lie with their owners and not British consumers", she said.

Westinghouse, Toshiba's US-based nuclear developer, produces the AP1000 reactors that are to be used at a planned £10bn power station at Moorside in Cumbria. It will also focus on reactor maintenance, the nuclear fuel business and decommissioning of the Fukushima nuclear plant in Japan, where reactors went into multiple meltdowns after a March 2011 natural disaster and tsunami. This deployment is running 2-3 years late, which may be part of why Toshiba is taking such heavy losses. Toshiba denied it had purposely covered up the problems.

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