Toshiba chairman quits as losses emerge

Company - Mohit Shah - Feb 14,2017

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toshiba chairman quits as losses emerge

Toshiba chairman Shigenori Shiga has quit his position, hours after the company was compelled to delay revealing facts of a multi-billion dollar loss.

The Japanese conglomerate was expected to reveal it was writing off about $6bn (£4.8bn) at its US-based nuclear business. However, the resignation of Toshiba chairman, Mr. Shigenori Shiga, came as a surprise.

The company said Mr. Shiga was stepping down from the post to take “management responsibility for the loss".

Toshiba further added that he would remain as a member of the board until June to support dealing with the outcome of the problems.

This financial meltdown for Toshiba has led several analysts to caution that the company’s future might be at risk.

Toshiba has asked regulators for an additional month before issuing its earnings report – which will cover the size of the loss and specifics of measures the company plans to take to confront its finances.

A hard impact on Toshiba’s shares was also seen on Tuesday, as they fell by 9% and the total drop is almost 50% since late December.

The losses are connected to a deal done by its US subsidiary, Westinghouse Electric, when it took over a nuclear construction and services business from Chicago Bridge & Iron in the year 2015.

Apart from detailing its losses, Toshiba is also widely expected to announce it is scrambling back its global nuclear business, and possibly moving out of the sector altogether, distant from its operations in Japan.

Among the other projects that would affect heavily is a scheduled new power plant in Cumbria, UK. Toshiba owns 60% stake in Nugen, the company which possesses the contract to build the plant.

If the Japanese company pull out of the project, the UK would have to seek for other backers to step in; South Korea's Kepco is assumed to be a likely candidate.