Toshiba Corp., one of Japan’s biggest technology companies, stated on Friday that it is planning to write down their nuclear unit after the impact on their credit profile following an accounting scandal worth £1.3 billion hit Toshiba’s ailing performance last year.
The 140-year old Japanese company has also verified that they are under investigation by the U.S. authorities for their U.S. facilities, however it is being denied by the company’s nuclear unit called, Westinghouse, that this is the case.
Toshiba, who wants to put all the accounting scandals behind it, has been moving to streamline the business. According to its business strategy, which was recently updated, the company has now add an extra 3,000 job losses which will leave a grand total of 14,000 jobs lost. This restructuring method is in addition to the sell-off of their medical equipment business for $5.9 billion and also the sell-off of other businesses such as their home appliances.
The latest events for Toshiba suggest that the company is still very much plagued by scandals. The writedown of their nuclear business is said to be a response to their failing credit score and the company’s poor ability to secure funds which called for a new stress test. It is reported that Toshiba is considering a writedown of the nuclear business worth 200 billion yen, sparking speculation among investors that there has been some sort of account fraud.
In a news conference, Toshiba Chief executive Masahi Muromachi said:
“We cannot gain lost trust and corporate value in just a day. We don’t know how long it will take.”
Westinghouse insists that no writedown is needed and that the American government is not investigating its finances, Chief Executive, Danny Roderick said:
“To our knowledge, Westinghouse financial reporting is not under investigation.”
However, Toshiba confirmed Bloomberg’s report that the U.S. Department of Justice and the Securities and Exchange Commission are requesting information about the company’s accounting. Toshiba says that it doesn’t know what U.S. agencies are looking for, but that they do have the purview because Westinghouse is an American company.
Nuclear energy is one of Toshiba’s drivers for growth, along with semiconductors. With the nuclear energy business in limbo, the company is expecting operating profits in April to be at 120 billion yen per year, up from the current loss of 430 million yen this business year so far. The company aims to increase profits to 270 billion yen in two years.
Toshiba acquired Westinghouse in 2006, but the nuclear energy sector has been declining in popularity since the Fukushima disaster in 2011. Many countries have frozen nuclear power expansion plans in response to the tragedy.