After losing half of their value in four months, shares in the Japanese conglomerate have rebounded as shareholders approved of a plan to split off Toshiba’s flash memory chip business.Toshiba shares staged strong gains in trading in Tokyo Thursday, rising as much as 5.6 percent before paring back to close four percent higher.
The rebound from a streak of losses that saw the stock half in value since December came after shareholders paved the way for the partial or full sale of Toshiba’s Nand chip unit, valued at two trillion yen ($18 billion, 16.7 billion euros).
The sale of Toshiba’s prized asset is crucial for the Japanese conglomerate to turn around its fortune, after it was forced to delay formal earnings reporting over massive losses at its US nuclear unit, Westinghouse, and whistleblower claims about accounting misconduct by senior executives at the unit.
On Wednesday, Westinghouse filed for Chapter 11 bankruptcy protection, with its parent Toshiba warning this would result in a net loss for the year to the end of March of 1.01 trillion yen, compared with an earlier estimate of 390 billion yen.
On Thursday, about 1343 Toshiba shareholders shouted at management and asked angry questions on the Westinghouse bankruptcy, including about the threat of delisting from the Tokyo stock exchange facing cash-strapped Toshiba.
President Satoshi Tsunakawa apologized for the crisis – the second big blow to Toshiba’s reputation after a scandal two years ago that revealed that top executives had pressured underlings to cover up weak results for years after the 2008 global financial meltdown.
“We apologies to all stakeholders, including shareholders, for causing this trouble and worry over our nuclear business,” Tsunakawa told the shareholders’ gathering.
Shigenori Shiga, who once headed Westinghouse and stepped down as Toshiba’s chairman in February, was not at the meeting, causing angry protests. Toshiba cited “health issues” for the absence of Shiga, who is still with the company.
According to the news agency AFP, one shareholder described the company as being a “laughing stock around the world,” while another one described management as “incompetent.”
uhe/jd (dpa, Reuters, AFP)