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Toshiba shares slide on renewed earnings delay

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AFP

Shares in Japanese conglomerate Toshiba have fallen more than 7% as the firm asked to postpone reporting its earnings for a second time.

In February, Toshiba’s chairman stepped down and the firm delayed the results over disagreements with its auditors.

Last month, the firm announced a 712.5bn yen ($6.3bn; £5bn) writedown due to some US nuclear assets being worth far less than estimated.

The situation has led some analysts to warn the company’s future is at risk.

The request for a second extension on filing its third-quarter earnings underscores the deepening woes for the troubled conglomerate.

The extension still needs regulatory approval. Failure to obtain that will mean Toshiba has to submit earnings by 27 March or face delisting from the stock exchange.

Nuclear losses

While often still associated with its technology products, Toshiba has become a diverse conglomerate. Its nuclear services business brings in about a third of its revenue.

Media captionWhat’s gone wrong at Toshiba?

Yet that side of the business has not made a profit since 2013 and nuclear services globally are struggling since the Fukushima disaster in 2011.

Toshiba had initially alerted investors in December 2016 that it faced a heavy one-off loss linked to a deal done by its US nuclear subsidiary, Westinghouse Electric.

Assets that it took on are likely to be worth less than initially thought and there is also a dispute about payments that are due.

Requesting permission for the new delay, Toshiba said some US senior managers had exerted “inappropriate pressure” in the accounting for an acquisition of a nuclear plant construction company.

Selling assets

Since the 16 December announcement, Toshiba shares have lost more than half of their value.

To offset the upcoming writedown, Toshiba is also rushing to sell most or even all its prized memory chip business, which it values at at least $13bn.

The company is the second largest chip maker in the world, behind Samsung.

Toshiba is also still struggling to recover after it emerged in 2015 that profits had been overstated for seven years, prompting the chief executive to resign.


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