Toshiba releases results, warns of 'going concern' risk

TOKYO: Toshiba Corp filed twice-delayed business results yesterday without an endorsement from its auditor and warned its very survival was in doubt, deepening a prolonged crisis at the Japanese conglomerate.

"There are material events and conditions that raise substantial doubt about the company's ability to continue as a going concern," Toshiba said in announcing bigger than previously estimated losses for the nine months through December.

The unaudited results showed the troubled firm lost ¥532.5 billion(RM21.3 billion) in April-December. It has previously forecast losses could balloon to more than a trillion yen in the fiscal year to March.

Toshiba shares have been hammered this year, losing more than half their value since late December when it first warned of multi-billion-dollar losses at Westinghouse. They fell 2.69% to finish at ¥223.5 yesterday, before the results.

The filing carried a disclaimer from auditor PricewaterhouseCoopers (PwC) Aarata LLC that it was unable to form an opinion of the results, increasing the likelihood that shares in the nuclear-to-TVs company will be delisted from the Tokyo Stock Exchange (TSE). The move is a first for a major Tokyo-based firm, and puts the stock exchange centre-stage as it weighs the pros and cons of forcing Toshiba to delist.

Toshiba CEO Satoshi Tsunakawa expressed regret that the auditor could not form an opinion, and said Toshiba pressed ahead with submitting its results rather than seek an unprecedented third delay.

"The decision on any delisting is for the stock exchange to make," he told a news conference in Tokyo, the latest in a string of briefings that have opened with apologies to shareholders. "We will do our utmost to avoid it."

Failing to act tough with Toshiba would bring into question authorities' credibility in maintaining standards for investors, but a delisting would complicate the crisis at Toshiba, increasing its financing costs and exposing it to further lawsuits from angry shareholders.

Toshiba has put up its prized memory chip unit and other assets for sale, and Westinghouse has filed for Chapter 11 protection from creditors.

Toshiba also said yesterday it was considering an initial public offering or sale of smart meter group Landis+Gyr.

Separately, Taiwan's Foxconn has offered up to ¥3 trillion for Toshiba's chip business, nearly US$10 billion (RM44.3 billion) higher than Toshiba's own estimate, The Wall Street Journal reported, citing people familiar with the matter.

Such a proposal by Foxconn would also put Japanese regulators in a tough position as they have vowed to vet bidders to block a sale to investors it deems a risk to national security. Foxconn is considered such a risk because o f its close ties to China.

Toshiba declined to comment on its chips business. Foxconn, formally known as Hon Hai Precision Industry, also declined to comment. – Agencies