Japanese conglomerate Toshiba Corp is considering putting its Westinghouse Electric Co unit into U.S. Chapter 11 bankruptcy as soon as Tuesday due to runaway costs at two U.S. nuclear power plant projects, sources have told Reuters. The following is a look at the fall-out from a possible Westinghouse bankruptcy filing.
Reuters 28th March 2017 read more »
When Toshiba appointed a new chairman last June, it was supposed to draw a line under an accounting scandal that had stunned Japan and shattered the reputation of one of the country’s most famous industrial names. But instead of hiring an outsider with a clean slate agenda, Toshiba handed the chairmanship to Shigenori Shiga, a dyed-in-the-wool company man whose personal networks extended across the conglomerate. Last month, Mr Shiga abruptly resigned and disappeared from public view as Toshiba revealed it was contending with the worst financial crisis in its history because of huge cost overruns on nuclear power stations being built by Westinghouse, its US subsidiary. Mr Shiga is a former head of Westinghouse, the reactor designer that Toshiba acquired for $5.4bn in 2006 and which is now eyeing the case for filing for Chapter 11 bankruptcy protection in the US. More troubling, say lawyers and other experts, are signs that Toshiba is incapable or unwilling to address glaring failures in its corporate governance that transpired in the $1.3bn accounting scandal and now appear to be a factor behind the nuclear debacle. The two affairs have also highlighted cultural problems – there is an ingrained arrogance at Toshiba, say former executives and business partners, that imagines it can take on any challenge and prevail. In both cases, that attitude seems to have wrought havoc.
FT 27th March 2017 read more »