Toshiba chairman resigns over nuclear arm's losses

Toshiba's chairman has resigned after the company logged such massive losses in its nuclear business that it must sell its lucrative computer chip business to avoid folding.

Toshiba is looking for potential partners to buy into its Westinghouse division. Picture: The Asahi Shimbun via Getty Images

The company projected a ¥712.5 billion (£5bn) loss for its nuclear business related to the acquisition of CB&I Stone & Webster by its US nuclear unit Westinghouse. The company also said it will not take on new projects to construct nuclear plants.

President Satoshi Tsunakawa said the group is also looking for potential partners to acquire a stake in Westinghouse. He bowed deeply at a news conference to apologise for “troubling investors and stakeholders”.

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Toshiba's nuclear woes trigger stock meltdown

Toshiba had earlier delayed reporting its official financial results by a month, citing auditing problems, sending its shares tumbling 8 per cent in Tokyo trading. After the market closed, it released unaudited numbers, warning they may change “by a wide margin”.

The company said chairman Shigenori Shiga will step down from the board but stay on as an executive. Toshiba said its net worth was at minus ¥191bn by the end of last year. The firm hopes to fix that by the end of March by selling its flash-memory business and other assets.

Tsunakawa told reporters the company viewed its move into the nuclear sector by acquiring Westinghouse in 2006 as a misstep that led to its present problems.

Westinghouse’s purchase in 2015 of CB&I Stone & Webster, a nuclear construction and services business, was aimed at winning more business in decontamination, decommissioning and plant projects, but it just amplified that problem.

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 said it will reorganise its nuclear business to be directly under Tsunakawa for stricter monitoring. It will also focus on reactor maintenance, the nuclear fuel business and decommissioning of the Fukushima nuclear plant, where reactors went into multiple meltdowns after the March 2011 earthquake and tsunami.

The question marks over the future of Toshiba’s nuclear business could impact a planned new power plant in Cumbria. Toshiba has a 60 per cent stake in NuGen, a venture with France’s Engie that has the deal to build the UK facility.