Toshiba dives on nuclear woes

The Toshiba Corporation logo is seen at the company's headquarters in Tokyo on Thursday. (AFP)

TOKYO: Shares in troubled conglomerate Toshiba dived again Friday as Standard & Poor’s (S&P) warned it may cut its credit rating while a possible savior of the Japanese firm’s loss-hit nuclear unit reportedly ruled out any rescue deal.
Investors have sliced more than 20 percent off its Tokyo-listed stock this week as Toshiba warned of huge losses and possible accounting fraud at its US nuclear arm Westinghouse Electric.
On Friday, shares plunged 9.2 percent to end the day at 184 yen ($1.62) with worries swirling that the firm will be booted off the Tokyo Stock Exchange’s prestigious first section as its finances deteriorate.
S&P said it may downgrade the conglomerate’s credit rating again, while Shunichi Miyanaga, the head of Japanese industrial giant Mitsubishi Heavy Industries (MHI), told the Financial Times that he had ruled out a rescue of Toshiba’s ailing nuclear unit.
There has been speculation Toshiba may need to join forces with another firm involved in atomic power to keep the business from crashing.
But Miyanaga told the newspaper in an interview published Friday that MHI and Toshiba’s nuclear businesses were too different to make a merger work.
“When you see all this negative news... there is a temptation to keep on selling,” Toshihiko Matsuno, chief strategist at SMBC Friend Securities, told AFP.
Toshiba shares are down about 60 percent since December, when it first warned of problems at Westinghouse.
On Tuesday, Toshiba shocked markets when it failed to report its results for April-December as scheduled then said it needed more time to sort out the situation at the troubled atomic division.
Instead it issued a grim preliminary forecast of a net loss of 390 billion yen ($3.4 billion) in the fiscal year to March, dragged by a write-down topping $6 billion at Westinghouse.
Toshiba also said it opened probe into possible wrongdoing by the unit’s senior executives while chairman Shigenori Shiga, who once headed Westinghouse, quit.
Citing unnamed sources, Japan’s Kyodo news agency has said the unit’s executives pressured underlings to understate losses linked to nuclear plant construction.
Less than two years ago, Toshiba, which makes everything from trains to memory chips, suffered an embarrassing profit-padding scandal that involved bosses pressuring subordinates to cover up weak earnings.
Since then it has launched a major restructuring, including selling its medical devices unit and most of its home appliance business. Toshiba is also moving to spin off its prized memory chip arm.