Toshiba shares plunge on Nikkei amid fears of huge loss, uncertain future; chairman quits

Shares of Toshiba fell sharply on Nikkei on Tuesday (Feb 14) after the Japanese firm postponed the release of its financial results scheduled for the day. The Japanese multinational conglomerate surprised markets by saying it will postpone its quarterly earnings by up to a month. 

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Shares of Toshiba, which makes everything from trains to memory chips, plunged as much as nine per cent to 226.9 yen after Nikkei, a business daily, reported Toshiba was going to issue a warning to shareholders that its future was in jeopardy. 

"We concluded on Monday afternoon that we need further research on the internal reporting and its impact on financial results," the company said in a statement. 

Meanwhile, AFP has reported that Satoshi Tsunakawa, chairman, president and CEO of Toshiba, has quit.

According to market reports, Toshiba is poised to book a huge loss of approximately $4 billion for the April-December period on its US nuclear business. Toshiba said it received internal information about inadequate governance during the acquisition process of a US nuclear construction company. 

According to market reports, Toshiba is poised to book a huge loss of approximately $4 billion for the April-December period on its US nuclear business. Toshiba explained it received internal information about inadequate governance during the acquisition process of a US nuclear construction company. 

In December 2016, Toshiba said it may book several billion dollars in losses at US power projects handled by the CB&I Stone & Webster Inc business, potentially requiring a huge writedown. 

Westinghouse Electric Company, which Toshiba had acquired in 2006, signed a definitive agreement in 2015 to acquire CB&I Stone & Webster, the nuclear construction and integrated services businesses of CB&I. 

Toshiba's announcement to delay earnings came as its Westinghouse subsidiary is engaged in a legal and accounting row with CB&I, which alleged in court that it expected a relatively small payment from Westinghouse of only $161 million when the transaction closed believing that the latter was taking on a challenged business. 

It is speculated that Toshiba will dramatically reduce its nuclear operations and stop building new atomic power stations. However, it may continue to design and make reactors plus other components.