Toshiba warns of huge losses in US nuclear power unit

Tokyo: Toshiba hinted at a possible fresh accounting scandal on Tuesday as it delayed the release of financial results but warned it would lose billions of dollars in its US nuclear power unit.
Its Tokyo-listed shares plunged after one of Japan’s best-known companies surprised markets by failing to release nine-month earnings at midday as scheduled.
Toshiba — which was hammered in 2015 by a profit-padding scandal — said it has requested a one-month extension for submitting earnings to market regulators.
Hours later the company — a cornerstone of Japan’s post-war industrial rise which now employs about 188,000 people globally — issued a grim preliminary earnings estimate.
It warned it was on track to report a net loss of 390 billion yen ($3.4 billion) in the current fiscal year to March, with losses in its atomic division topping 700 billion yen.
The firm said its chairman Shigenori Shiga would step down from his post but stay with the company — a common act of contrition at scandal-hit Japanese firms — as it probes an acquisition by Westinghouse Electric, its US atomic power unit.
Toshiba shares tumbled 8 per cent to end Tuesday’s session at 229.8 yen ($2).
“The company, with deep regret, has submitted an application for approval to extend the deadline for submission” of its financial results until mid-March, it said in a statement.
Toshiba said its lawyers and an independent auditing firm were studying accounting done on Westinghouse’s purchase of a US company that builds nuclear plants.
It added that managers at Westinghouse expressed concerns that senior executives had been “exerting inappropriate pressure” to speed up the acquisition.
“If there was a possibility of an invalidation of internal controls, it might affect quarterly financial reporting,” Toshiba said in explaining its decision to delay reporting its results. — AFP