Published: Thu, February 16, 2017
Global Media | By Garry Long

Toshiba chairman steps down amid nuclear losses

Toshiba chairman steps down amid nuclear losses

At first, the only word from the Japanese company was a notice on its website, posted a few minutes after noon, that the report had not yet become available. Toshiba declined to comment on the audit process.

According to sources close to the matter, losses related to its USA nuclear business are likely to reach around $5 billion.

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

"We are considering various offers for the chips business and we will act flexibly - even if that means giving up a majority of the unit", Reuters reported CEO Satoshi Tsunakawa as saying.

As a result shareholders' equity at the end of December was minus $1.7 billion.

The company released on Tuesday preliminary financial results on an unaudited basis, which estimated a group net loss of 500 billion yen for the April-December period, mainly incurred by the huge loss from its US nuclear business.

Toshiba subsidiary Westinghouse Electric reportedly overpaid for the acquisition of Chicago Bridge and Iron (CBI) in 2015. It said a law firm hired by Toshiba had interviewed those involved in the issue and found inconsistencies in their stories.

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"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 in a statement.

Instead, Toshiba's expected withdrawal from the United Kingdom nuclear power market would leave a gaping hole in the British government's nuclear strategy, said Rebecca Long-Bailey, the shadow business secretary.

During the year-earlier period, Toshiba lost a similarly significant 479.4 billion yen.

During the past few decades, Toshiba has been wholly or partly involved in the construction of 20 nuclear reactors in Japan, none of which are now operating following the triple meltdown at Fukushima Daiichi in March 2011.

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

The threat to the industrial giant, which produces a range of products from consumer electronics to nuclear power, casts doubt on the project to build a new nuclear reactor in Moorside, Cumbria.

Auditors have ascertained that CB&I's assets could be worth less than their last valuation, atop ongoing disputes about payments and other factors driving up the costs of projects the outfit is handling in the U.S. states of Georgia and SC. Toshiba later admitted it may have overestimated the value of CB&I Stone and Webster.

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