Toshiba Shares Slump by 7.5% as Crisis Deepens

Shares in Toshiba Corp on Wednesday, March 15, collapsed after it said it would consider a sale of Westinghouse but did not offer any clarity on whether it would proceed with a Chapter 11 filing for the U.S. nuclear unit – a move that could stem losses.

Toshiba’s failure to submit audited third-quarter earnings on Tuesday and its announcement of an expanded probe into Westinghouse also contributed to broad disappointment as did the Tokyo Stock Exchange’s placing of the stock on its supervision list.

While the bourse’s move was an automatic one that follows Toshiba’s failure to clear up concerns about its internal controls a year and a half after a 2015 accounting scandal, it increases the risk of a delisting.

Market participants said the bourse’s action meant that the shares were now “untouchable” for institutional investors who cannot invest due to compliance reasons.

Toshiba would be delisted if the bourse is not satisfied with a report on internal controls that Toshiba submitted on Wednesday. The report, required since the 2015 accounting scandal, must also address internal control lapses since then.

Shares in the TVs-to-construction conglomerate slid 7.5 percent in early trade. They have plunged by more than half since December, slashing the company’s market value to $7.4 billion.

Toshiba will meet with creditor banks later on Wednesday to explain the situation, sources familiar with the matter said, Reuters reports.

 

 

 

 

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