Toshiba’s Chairman Resigns as Its Nuclear Power Losses Mount

Toshiba’s Chairman Resigns as Its Nuclear Power Losses Mount

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A Toshiba spokesman at the company’s headquarters in Tokyo on Tuesday. The company said its chairman, Shigenori Shiga, would resign to take responsibility for a $6.3 billion loss.

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Toru Hanai/Reuters

TOKYO — Toshiba, the embattled technology conglomerate, said it would take a financial hit of more than $6 billion and its chairman would step down as the impact of its disastrous bet on American nuclear power continued to rock an icon of corporate Japan.

The announcement of the planned write-down and resignation, which came after a day of uncertainty on Tuesday as Toshiba equivocated on whether it would release the news, reflected intense pressure on Toshiba executives over the write-down — and the business decisions that led up to it. Company officials said Tuesday that they were examining whether managers had bypassed internal controls when they struck a deal for a business at the center of the problems.

The hits come from Toshiba’s investment in Westinghouse, the American nuclear power company, reflecting spiraling cost overruns at nuclear plant projects in the United States. In December, Toshiba said it would most likely have to declare “several billion U.S. dollars” in write-downs at the nuclear unit.

On Tuesday, it put the size of the Westinghouse write-down at 712.5 billion yen, or about $6.3 billion. Toshiba also said its chairman, Shigenori Shiga, would resign to take “management responsibility for the loss.”

The figure announced on Tuesday was at the high end of the range expected by analysts, who had suggested the loss would be between $4 billion and $7 billion.

Initially, it looked as though Toshiba might postpone the reckoning altogether.

The company’s share price dropped 8 percent earlier on Tuesday after it asked Japanese financial regulators to extend a noon reporting deadline for a month, to March 14. Then a few hours later it abruptly disclosed the write-down, along with its most recent quarterly results, though it said the numbers represented an updated internal assessment, not the final figures it would eventually file to stock market regulators.

Explaining its request to delay filing official financial statements, Toshiba said it needed additional time for lawyers to examine an acquisition by Westinghouse that is at the center of the planned write-down.

In that deal, which was completed in 2015, Westinghouse bought an American construction company that it had been using as a contractor at nuclear plants it was building in the United States.

Toshiba’s auditors determined afterward that Westinghouse had overpaid. Delays and cost overruns at the projects, they said, meant the construction company, CB&I Stone & Webster, was saddled with potential liabilities that Westinghouse had failed to account for.

On Tuesday, Toshiba said lawyers looking into the deal were examining whether senior managers at Westinghouse had exerted “inappropriate pressure” on subordinates who were reviewing Westinghouse’s offer for CB&I Stone & Webster.

The company did not elaborate, saying only that the managers’ actions may have circumvented “internal controls.” It said lawyers were “carrying out an additional investigation” and interviewing employees at Westinghouse.

Toshiba has struggled to make money in nuclear power since it bought Westinghouse for $5.4 billion in 2006.

In anticipation of the write-down, Toshiba said last month that it planned to divest its profitable microchip division and sell a portion to outside investors. It also said it was re-examining the future of its nuclear business, prompting analysts to speculate that it would stop bidding for contracts to build new power plants and refocus on reactor design.

Toshiba’s stock market value has shrunk by half since its warning about the loss from Westinghouse in December.

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