Toshiba warns it may not survive crisis
TOKYO: Toshiba Corp, the 142-yearold conglomerate, warned on Tuesday it may not be able to continue as a going concern as it grapples with billions of dollars in losses from its Westinghouse Electric nuclear business.
The disclosure came as the Japanese company reported earnings for the third quarter after missing two previous deadlines for financial results. Toshiba posted an operating loss of 576.3 billion yen ($5.2 billion) for the nine months ended December 31 and said it had negative shareholders equity of 225.6 billion yen, but, significantly, it wasn’t able to get auditor PricewaterhouseCoopers Aarata to approve those figures.
Toshiba has been at odds with its auditors over Westinghouse, which filed for bankruptcy in the US last month. The auditing firm submitted an independent review with Toshiba’s results that emphasised the risks to its future because of losses in the Westinghouse unit responsible for atomic projects and breach of covenants on 284 billion yen in loans. Toshiba’s inability to report earnings has also raised speculation of a possible delisting from the Tokyo Stock Exchange.
“Toshiba has done everything in its power to gain the understanding of the auditors,” CEO Satoshi Tsunakawa said at a briefing in Tokyo. “Without clear prospects for auditor approval, we could no longer inconvenience and worry our investors and other stakeholders and decided on this very unusual way of releasing results.”
The disclosure came as the Japanese company reported earnings for the third quarter after missing two previous deadlines for financial results. Toshiba posted an operating loss of 576.3 billion yen ($5.2 billion) for the nine months ended December 31 and said it had negative shareholders equity of 225.6 billion yen, but, significantly, it wasn’t able to get auditor PricewaterhouseCoopers Aarata to approve those figures.
Toshiba has been at odds with its auditors over Westinghouse, which filed for bankruptcy in the US last month. The auditing firm submitted an independent review with Toshiba’s results that emphasised the risks to its future because of losses in the Westinghouse unit responsible for atomic projects and breach of covenants on 284 billion yen in loans. Toshiba’s inability to report earnings has also raised speculation of a possible delisting from the Tokyo Stock Exchange.
“Toshiba has done everything in its power to gain the understanding of the auditors,” CEO Satoshi Tsunakawa said at a briefing in Tokyo. “Without clear prospects for auditor approval, we could no longer inconvenience and worry our investors and other stakeholders and decided on this very unusual way of releasing results.”
