Japan's Toshiba Nuclear Power Loss of 43.1 Billion Yuan Will Be Insolvent by the End of 2016

[Global Technology Reporter Wang Huan] According to the report of the Japanese Kyodo News Agency on February 14, Toshiba’s performance during the restructuring period is expected to be announced on the 14th. It is expected that the financial statements for the first three fiscal quarters (April to December) of fiscal 2016 will Earned 712.5 billion yen (approximately RMB 43.1 billion) in losses for the United States nuclear power business. The net profit of the group is expected to have a loss of 499.0 billion yen. As of the end of December of last year, the company had already fallen into a position of insolvency and its equity fell to negative 191.2 billion yen. In order to fill the deficit, Toshiba will consider the sale of new company shares established after splitting the semiconductor business.

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The nuclear power business in the United States found that there were new violations through internal reports. In order to investigate the issue, the company's original financial report disclosure time for the first three fiscal quarters on the 14th was postponed by one month.

Toshiba, the big corporation representing Japan, is currently in an extraordinary state of affairs. According to the survey results, the company's performance may be significantly revised. Shiga Shige, chairman of the board, will resign on the 15th.

Toshiba expects net profit for the full year of 2016 fiscal year to be a loss for the third consecutive year. From the previously forecasted profit of 145 billion yen, it was reduced to a loss of 390 billion yen. The debt will exceed the capital of 150 billion yen. The company wants to sell its semiconductor business to avoid the insolvency of Toshiba’s unsecured shares.

President Gang Gangzhi held a press conference at the headquarters in Tokyo on the 14th, apologizing for delaying the release of his financial report: “I am very sorry for everyone’s troubles. I’m sincerely apologetic.” Regarding violations, it only means “under investigation”. (Sao Sato, an external director of the company that serves as chairman of the audit committee) did not elaborate.

The newly discovered violation was the problem of the US nuclear company Westinghouse (WH) in the acquisition of a US nuclear power plant construction company. It is reported that the management of WH has caused pressure on the loss issue. An internal report stated: “Some people pointed out that the worry has exerted undue pressure.”

Due to the inability to obtain the audit company's consent, Toshiba did not release its earnings report for the day as an announcement of its own performance expectations. In order to clarify the responsibility for the huge loss, the monthly salary of President Gang Gangzhi will increase from 60% to 90%.

The loss of the nuclear power business resulted from the fact that WH, which is responsible for the business, purchased the US nuclear power plant construction company whose operating conditions were deteriorating at an overestimated price, resulting in a loss of more than 620 billion yen. Together with the "goodwill" equivalent of the WH brand value, the loss exceeded 700 billion yen.

Due to Toshiba’s postponement of its financial report, which was originally scheduled for noon on the 14th, its stocks were sold concentratively and fell by nearly 10% compared with the previous day's closing price.

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