Toshiba chairman resigns over huge loss

Toshiba warned on Tuesday it was on track to book a $6.2 billion writedown in its United States 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.

The company said Shigenori Shiga, the chairman, will step down from the board but stay on as a Toshiba executive.

Its Tokyo-listed shares tumbled 8 percent to end Tuesday's session at $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.

Future growth driver

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 $3.4 billion in the current fiscal year to March, as it faced a huge writedown topping $6.2 billion at Westinghouse.

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.

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

(China Daily 02/15/2017 page12)