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Toshiba execs under fire as loss forecast balloons

Toshiba execs under fire as loss forecast balloons

Angry investors lambasted Toshiba executives at a shareholder meeting Thursday after it warned annual losses could balloon to more than $9.0 billion but agreed to the sale of its memory chip unit, the jewel in the firm’s crown.

The heated meeting held just outside Tokyo comes a day after the huge conglomerate said its troubled atomic reactor maker Westinghouse Electric had filed for bankruptcy protection in the United States.

Toshiba, one of the pillars of corporate Japan, also warned Wednesday its annual losses mainly tied to Westinghouse could blow out to 1.01 trillion yen ($9.07 billion), compared with an earlier projected shortfall of 390 billion yen.

The company has delayed formally reporting its earnings over the problems at Westinghouse, including whistleblower claims about accounting misconduct by senior executives at the unit.

Thursday’s meeting was held to get shareholder approval to spin-off Toshiba’s prized memory chip business, seen as key for the cash-strapped company to turn itself around. The motion was approved.

“It’s unforgivable that they could book a trillion yen loss — management should quit,” a 75-year-old investor, who identified himself only as Tomari, told AFP before the meeting started.

President Satoshi Tsunakawa apologised for the crisis Thursday, which comes less than two years after Toshiba’s reputation was badly damaged by separate revelations that top executives had pressured underlings to cover up weak results for years after the 2008 global financial meltdown.

That scandal laid bare serious problems with Toshiba’s internal controls and governance.

“We apologise to all stakeholders, including shareholders, for causing this trouble and worry over our nuclear business,” Tsunakawa said.

Shigenori Shiga, who once headed Westinghouse and stepped down as Toshiba’s chairman in February, was not at Thursday’s meeting.

“Why is Mr Shiga not here today?” asked one angry shareholder. “The people who were in charge aren’t even here today.”

Toshiba cited “health issues” for the absence of Shiga, who is still with the company.

“Toshiba is now a laughing stock around the world,” said one shareholder. “You’re all incompetent managers. Do you even know what’s going on?”

Toshiba shares picked up Thursday morning, but they have lost more than half their value since late December when it warned of huge losses and the probe at Westinghouse.

Japanese financial regulators have given the company until April 11 to publish results for the October-December quarter, which were originally due in mid-February.

The firm is at risk of an embarrassing delisting from Tokyo’s stock exchange.

“I’m watching the share price everyday,” a 70-year-old investor said.

“The value of my small investment depends on them” she added, referring to Toshiba executives.

Westinghouse, acquired by Toshiba a decade ago, was once hailed as a future growth driver after the 2011 Fukushima nuclear accident brought new business in Japan to a halt.

But the US firm has been hit by the project delays and cost overruns at plants in two states while weakening prospects for the nuclear power industry globally have also weighed on its fortunes.

–AFP