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Toshiba Chairman Steps Down Over $6.3 Billion Writedown

16 February 2017

In addition, Nikkei reported that Toshiba is considering selling an interest in a United Kingdom nuclear venture to Korea Electric Power Corp., aiming to reduce its involvement in the riskier side of the atomic power business in the wake of massive losses linked to USA projects.

The delay sent shares in the Japanese conglomerate down by 8% in Tokyo, and added to speculation that its financial woes could become an existential crisis.

Shigenori Shiga, a Toshiba chairman that hailed from the failed USA -based Westinghouse Electric nuclear plant subsidiary, tendered his resignation.

Toshiba bought the US-based Westinghouse Electric Company, nuclear energy business in 2006 for $US5.4 billion ($AU7.1 bn), but it suffered from rising cost overruns on two key projects.

The huge writedown means Toshiba expects to end the current financial year in the red for the second straight year with a net loss of 390bn yen, compared with a net profit of 145bn yen estimated in November, according to its preliminary results.

Auditors questioned Toshiba's latest reporting on the acquisition of CB&I Stone & Webster after a whistleblower, an employee at Westinghouse, wrote a letter to the Westinghouse president. The company previously planned to limit the sale to 20 per cent to maintain control.

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"I apologise deeply for all the inconvenience we have caused our stakeholders", said Toshiba Chief Executive Satoshi Tsunakawa during a press conference.

In a statement released on Monday, Toshiba said it is now in the process of finalizing the amount of losses with auditing firms and financial institutions.

During the past few decades, Toshiba has been wholly or partly involved in the construction of 20 nuclear reactors in Japan, none of which are now operating following the triple meltdown at Fukushima Daiichi in March 2011.

In a section entitled "outlook for the project", Toshiba said that it "will consider participating in the project without taking on any risk from carrying out actual construction work".

Toshiba will still consider participating in the Moorside project to build three new nuclear reactors near Sellafield in Cumbria, the Japanese technology giant has revealed. The company didn't disclose earnings for the division in the most recent quarter. It wasn't. Over the last decade, Westinghouse has cost Toshiba tons of money, due to what The New York Times calls "years of flawed business decisions".

For fiscal 2016, the company's provisional forecast include: a net loss of 390.0 billion yen or a loss per share of 92.11 yen; and net sales of 5.52 trillion yen.