Toshiba chairman quits over $3.4bn loss

  • Published
Shigenori ShigaImage source, Reuters
Image caption,
Mr Shiga stepped down "to take management responsibility for the loss"

Toshiba chairman Shigenori Shiga has resigned, hours after the Japanese conglomerate revealed details of a multi-billion dollar loss.

Earlier Toshiba had delayed issuing its results, but it then said it was set to report a net loss of 390bn yen ($3.4bn) in the year to March 2017.

The company said it expected to take a 712.5 billion yen ($6.3bn, £5bn) writedown at its US nuclear business.

The situation has led some analysts to warn the company's future is at risk.

Mr Shiga was stepping down "to take management responsibility for the loss", the firm said.

Shares fell by as much as 9% on Tuesday and have lost about 50% since late December, when it first warned about the extent of the problems.

Chip deal

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

Assets that it took on are likely to be worth less than initially thought and there is also a dispute about payments that are due.

It has already announced plans to sell off part of its profitable memory chip business to raise funds. It is the second largest chip maker in the world, behind Samsung.

The company is still struggling to recover after it emerged in 2015 that profits had been overstated for seven years, prompting the chief executive to resign.

UK plant in limbo

Toshiba has a 60% stake in NuGen, a joint venture with France's Engie, which has the contract to build a new nuclear power plant in Cumbria in the UK.

It is estimated that the Moorside plant will eventually provide as much as 7% of the UK's energy needs.

In a statement, NuGen said: "NuGen acknowledges the announcement that Toshiba's review into the future of its nuclear power business outside Japan is complete and that it remains committed to developing NuGen's Moorside Project."

Image source, NuGen
Image caption,
The Moorside nuclear plant on the Cumbrian coast is due to open in the mid-2020s

Business and Energy Secretary Greg Clark said: "I welcome the continued commitment of the NuGen consortium to the Moorside project. The UK Government is committed to new nuclear as an important part of our energy mix."

Tom Greatrex, chief executive of the UK Nuclear Industry Association, said: "Building new nuclear capacity in west Cumbria is an integral part of the UK being able to replace old power stations, keeping a balanced mix as carbon emissions are reduced. This is a vital part of our country's energy future."