Toshiba Announce $12B Loss, Future In Doubt As PWC Refuse To Sign Off Books
Toshiba’s future has just got a whole lot worse with the Japanese Company admitting that they “doubt” it can survive in the face of mounting losses.
Toshiba said that they will report a A$12.1 Billion dollar, loss for its fiscal year ended March 31, 2017.
“[T]here are material events and conditions that raise substantial doubt about the company’s ability to continue as a going concern,” Toshiba said.
But like a lot of struggling Companies who due to scandal and poor business decisions, Toshiba claim that they a comeback plan that includes selling its semiconductor unit and asking its banks for forbearance.
The Wall Street Journal reported that their semiconductor business, which makes flash-memory chips for smartphones and computer servers, has drawn a bid of up to ¥3 trillion from Taiwan’s Foxconn Technology Group, people familiar with the bid said earlier this week.
“I believe our financial standing is solid, despite the numbers we put out, if we consider the value of the unit for sale,” Toshiba Chief Executive Satoshi Tsunakawa said at a news conference on Tuesday. He declined to comment on the status of the sale.
The company issued the warning alongside its latest earnings report, which came two months late and without the approval of its auditor.
Toshiba, which traces its roots to 1875, is fighting for survival because of back-to-back blows—an accounting scandal in 2015 and then cost overruns at U.S. nuclear-reactor projects being built by its Westinghouse Electric Co. subsidiary.
Toshiba had to postpone the announcement of its nine-month results on two occasions due to differences with its auditors. On Tuesday, it pushed ahead with the release even though the auditors refused to sign off.
The auditors, PricewaterhouseCoopers, said they couldn’t be certain that earlier accounting for Westinghouse was proper.
Mr. Tsunakawa said Toshiba believes its figures are solid, and he expressed frustration about the standoff.
“They asked us to prove that we didn’t have anything wrong in our bookkeeping process, and that is quite a burden,” he said.
Getting the approval of auditors is customary for some earnings filing in Japan but isn’t mandatory.