Toshiba chairman quits as firm posts $6.3bn loss

The chairman of Japanese electronics and nuclear giant Toshiba is stepping down after the firm said on Tuesday it would book an estimated 712.5bn yen ($6.3bn) loss in its US nuclear power business.

Toshiba chairman, Shigenori Shiga, will step down to take responsibility for the losses in connection with its US nuclear business acquisition, while other executives, including President Satoshi Tsunakawa, will take pay cuts, the company said in a statement.

The huge write down means Toshiba expects to end the current financial year in the red for the second straight year with a net loss of $3.4bn, compared with a net profit of $1.3bn estimated in November, according to its preliminary results.

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The company also predicts an operating loss of $3.6bn, although it forecast an operating profit of $1.6bn three months ago. Sales are estimated at $48bn, up from $47bn.

Toshiba said, however, these numbers might change as it had decided to postpone the release of its quarterly earnings for a month for further investigation into its US nuclear power business.

Shares in Toshiba plunged eight percent in Tokyo trading on Tuesday after falling as much as 9.4 percent following the report of the delay.

Toshiba said in a separate statement it had to put off the release of its quarterly earnings as it learned of “inappropriate pressure” at its US nuclear unit Westinghouse Electric over the purchase of CB&I Stone & Webster, a US nuclear power plant builder.

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Toshiba is conducting an “additional investigation into the existence of any inappropriate pressure … and on any impact on the financial statement if there was any”, the company said.

Toshiba said it would release the financial results for the last quarter of 2016 on March 14.

Last month, Toshiba said it would spin off its core flash memory business and sell a stake in the sector to raise funds to help cover the losses.

The company has also decided to review its nuclear power business as it has already suffered a setback at home and abroad since Japan‘s worst atomic disaster at the Fukushima Daiichi Nuclear Power Station in March 2011.

In the previous financial year ending in March 2016, Toshiba posted a record net loss of $4.1bn as it was forced to undergo substantial restructuring in the wake of a major accounting scandal.

In 2015, Toshiba chief executive resigned after the company admitted it had inflated profits over seven years.