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Toshiba shares dive as chairman quits

Japanese conglomerate Toshiba has delayed an anxiously awaited nine-month earnings report as it sorts out cost overruns at its US nuclear arm. The company's chairman, Shigenori Shiga, announced his resignation.

Toshiba said Tuesday its Chairman Shegenori Shiga was stepping down from his post as the company warned it was set to book multibillion-dollar losses in its US nuclear business. 

Shares in Toshiba plummeted 8 percent earlier in the day after the Japanese firm postponed the release of financial results. The company surprised markets by saying its nine-month earnings report "had not yet become available."

The drop in share value was also sparked by a report in the "Nikkei" business daily which said Toshiba was going to issue a warning to shareholders that its future was in jeopardy. On Tuesday, the company forecast a net loss of 390 billion yen ($3.4 billion, 3.2 billion euros) for the current fiscal year to March, with losses in its atomic division topping 700 billion yen.

Major changes ahead?

The expected loss is linked to problems with the value placed on a deal involving the purchase of a nuclear services company by Toshiba subsidiary Westinghouse Electric.

Watch video 01:27

Trouble for Toshiba (2016)

There is speculation that Toshiba will dramatically reduce its nuclear operations and stop building new atomic power stations, but would continue to design and make reactors plus other components.

The engineering conglomerate, which makes everything from trains to memory chips, is undergoing a major restructuring after a huge accounting scandal.

Toshiba has already sold its medical devices unit to Canon and most of its appliance business to China's Midea Group.

hg/jd (AFP, Reuters)

 

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