Japanese electronics and energy conglomerate Toshiba Corp. said Tuesday that its chairman is to step down over an estimated loss of 712.5 billion yen (6.3 billion U.S. Dollars) from its U.S. nuclear business.
The company said Shigenori Shiga, Representative Executive Officer and Chairman of Toshiba, will step down on Feb. 15 from his current position, but will remain in the board of directors to focus on solving issues related to the U.S. unit.
Meanwhile, the company’s president Satoshi Tsunakawa and some other executives will take pay cuts to take responsibility for the huge loss, said the company.
The company released on Tuesday preliminary financial results on an unaudited basis, which estimated a group net loss of 500 billion yen for the April-December period, mainly incurred by the huge loss from its U.S. nuclear business.
It also expects a group net loss of 390 billion yen for the full financial year through March 31, instead of a more optimistic estimation in Nov. 2016 of a net income of 145 billion yen.
The company, however, said that the results are still under review by independent accounting auditor and might be amended later.
The company has postponed releasing its finalized financial results for the nine months through December for up to one month due to auditing problems related to suspected misconduct at its U.S. Unit.
Senior management at Toshiba’s U.S. nuclear unit Westinghouse Electric Co. has been suspected of exerting “inappropriate pressure” in order to advance certain process during the acquisition of CB&I Stone & Webster, a U.S. nuclear plant construction company. The 2015 acquisition has been a major cause of the massive loss in Toshiba’s nuclear power business.
The company will conduct further investigations on the issue during the next month.
The delay briefly pushed Toshiba’s stocks down for over nine percent on the Tokyo stock market on Tuesday.
Toshiba has been struggling with its nuclear business as demands for nuclear power plants have slowed since the 2011 Fukushima nuclear disaster.
The company said last month that it would spin-off its top-earning flash memory business at the end of March, in a bid to make up for huge losses the group is facing from write-downs in its failing nuclear power business. Enditem