Toshiba says it may write down nuclear business, US units probed2 min read . Updated: 18 Mar 2016, 06:40 PM IST
At a business strategy update on Friday, it unveiled an extra 3,000 job cuts, taking its planned total to 14,000
Tokyo: Japan’s Toshiba Corp said on Friday it was looking at whether it would need to write down its nuclear business given damage to the company’s credit profile after a $1.3 billion accounting scandal last year.
The electronics conglomerate also confirmed a report that US authorities are probing accounting at its US units, although its Westinghouse nuclear power subsidiary denied that its finances were under investigation.
Wanting to draw a line under the accounting scandal, Toshiba has sought to move on to streamlining its businesses, whose poor performances had been masked by years of false bookkeeping.
At a business strategy update on Friday, it unveiled an extra 3,000 job cuts, taking its planned total to 14,000—a restructuring measure that comes on top of a $5.9 billion sale of its medical equipment unit as well as the sale of its home appliances business announced this week.
But the latest developments concerning its nuclear business and the probe highlight that its accounting woes are far from over.
While a stress test on its nuclear business last quarter had shown that there was no need for a writedown, Toshiba said its lower credit ratings and its weaker ability to procure funds had prompted a new test.
Nuclear power providers usually fund new plants through large-scale equity and bond issuance, making their creditworthiness extremely important.
“We cannot gain lost trust and corporate value in just a day. We don’t know how long it will take," chief executive Masashi Muromachi told a news conference.
The Asahi newspaper reported earlier on Friday that Toshiba is considering a 200 billion yen ($1.8 billion) writedown for Westinghouse, fanning investor concerns that the value of assets and goodwill related to the unit were overstated.
Nuclear power has become less popular since Toshiba’s acquisition of Westinghouse in 2006, especially in the aftermath of the 2011 Fukushima disaster which prompted many countries to freeze nuclear energy expansion plans.
Toshiba confirmed a Bloomberg report that several US units have received a request for information from the US department of justice and the securities and exchange commission regarding accounting issues.
Muromachi said that he did not know what the US officials were looking for.
US authorities could exert jurisdiction because the case involved US-based Westinghouse, Bloomberg said but Westinghouse strenuously denied this.
“To our knowledge, Westinghouse financial reporting is not under investigation," Danny Roderick, chief executive of the unit, said in a statement.
Focusing on nuclear energy and semiconductors to drive growth, the 140-year-old firm forecast it would swing to an operating profit of at least 120 billion yen for the year starting in April, from an estimated loss of 430 billion yen for the current business year.
It aims to lift operating profit to 270 billion yen in two years time, it added. Reuters