Scandal-hit Toshiba tries to draw line in sand with £207m loss
The accounting scandal, which broke in July, has wiped more than a third off the company’s value
The electronics and industrial giant Toshiba faces a huge uphill struggle to repair its tattered corporate reputation as it reported a much-delayed annual loss of 37.8bn yen (£207m) yesterday.
Toshiba had missed two deadlines to report its results after failing to get a handle on an £850m accounting scandal. The company, which will build one of Britain’s new nuclear reactors at Sellafield, also revealed that it had overstated profits for the past seven years by 224.8bn yen, roughly triple its initial estimate.
The accounting scandal, which broke in July, has wiped more than a third off the company’s value. Toshiba shares jumped almost 5 per cent in Tokyo yesterday on hopes that it has drawn a line under the debacle.
Hisao Tanaka, the president of the conglomerate, fell on his sword, taking half of the 16-strong board with him. The group said yesterday that former Shiseido cosmetics president Shinzo Maeda would now head the revamped 11-member board.
The profit misstatements accumulated over time as division heads failed to report losses for fear of incurring the wrath of head office. Only last week the company was finding new accounting problems, writing down the value of its nuclear business, its semi-conductor division and its struggling laptop and printers business.
But chief executive Masashi Muromachi said he was considering a “bold restructuring” of its semiconductor business by the end of the year.
Toshiba singled out the UK as one area where it had seen a “strong performance” and said the eurozone had sustained a gradual recovery. However, it added that sales in the US had lost momentum.
Despite China’s slowdown, solid growth had been seen in South-east Asia and India.
The delayed result followed the sale of its stake in the Finnish engineer and escalator manufacturer Kone. The sale of the 4.6 per cent stake was worth about £620m.
Toshiba also said yesterday there was no need to write down the value of its US Westinghouse nuclear operation.