Toshiba approves bankruptcy for US atomic unit: Report

Tokyo, March 29

Toshiba has approved a plan to place its US nuclear unit in bankruptcy protection, a report said on Wednesday, as the troubled division wrestles with multi-billion-losses and accounting fraud claims.

Japan’s Nikkei business daily said Toshiba’s board gave Westinghouse Electric the green light to make a Chapter 11 filing in a US court, which temporarily shelters struggling firms as they try to restructure their affairs and outstanding debts.

Toshiba, a pillar of corporate Japan and one of its best-known brands overseas, declined to comment on the report.

Its embattled shares rose 1.19 per cent to sit at 219.8 yen by the break.

The vast conglomerate has lost more than half its market value since late December when Toshiba warned over a flood of red ink at Westinghouse and said it was investigating whistleblower claims of accounting fraud by senior executives at the division.

Japanese financial regulators have given the company until April 11 to publish results for the October-December quarter, which were originally due in mid-February.

Toshiba delayed their release, saying it needed more time to probe claims of misconduct by senior managers at Westinghouse and gauge the impact on its finances.

Toshiba has previously warned it was on track to report a net loss of 390 billion yen (USD 3.5 billion) in the fiscal year to March, as it faced a writedown topping 700 billion yen at Westinghouse.

This month, Standard & Poor’s cut its credit rating on Toshiba again, warning its finances were quickly deteriorating.

Toshiba has said it would try to sell Westinghouse, once lauded as the future of its atomic business after the 2011 Fukushima disaster sidelined new orders in Japan. But the business was hit by big delays and cost overruns.

The Japanese giant is trying to spin off its prized memory chip business to raise cash, after earlier selling its medical devices unit and most of a home appliance business.

The latest crisis comes less than two years after Toshiba’s reputation was badly damaged by separate revelations that top executives had pressured underlings to cover up weak results for years after the 2008 global financial meltdown. — AFP