Japanese multinational conglomerate Toshiba has warned that its very survival is at risk – as the organization moves from one crisis to another. The company finally released its delayed financial results after they were initially delayed twice – and the report makes for grim reading with Toshiba recording a loss of ($4.8bn) for April to December. However, it has been further disclosed that the results have not been approved by the firm’s auditors.
In a statement released by Toshiba, the Japanese electronics colossus said the company’s future was now at serious risk, a spokesman for the firm said: “These are material events and conditions that raise substantial doubt about the company’s ability to continue as a going concern.” The financial results have also raised the possibility that the organization could be delisted from the Tokyo Stock Exchange.
Toshiba’s president, Satoshi Tsunakawa apologized for the problems currently afflicting the firm and stated that the auditor’s decision not to approve the financial report was ‘truly regrettable’. In addition to this, he stressed that he hoped that Toshiba would not be delisted from the stock exchange.
Toshiba established itself as a global leader in consumer electronic products, but it has faced a series of difficulties in recent years. An accounting scandal was uncovered in 2015 – and that subsequently led to the resignation of a number of the organization’s senior management team, which included the CEO. Toshiba was found to have inflated the previous seven years’ profits by $1.2billion. In January, this year they encountered more problems were reports surfaced that its US nuclear unit Westinghouse was in severe financial trouble. The nuclear unit was placed into Chapter 11 bankruptcy which protects its creditors while it undergoes restructuring.
Reports emerged that Taiwanese electronics manufacturer Foxconn was reportedly willing to offer $27billion for Toshiba’s computer chip business, if such a deal was brokered, it would significantly shore up the losses if it went ahead. However, the refusal by the firm’s auditors Price-Waterhouse-Cooper-Aarata to sign off the company’s accounts is a monster body blow. Now, faced with a deadline, Toshiba has made the unprecedented move of publishing the results without the auditor's approval.
Toshiba's statement added: "At the present time, substantial doubt about the company's ability to continue as a going concern exists as of the filing date of the quarterly report." The loss reported is for the first nine months of Toshiba's financial year, covering April to December 2016.
