Shareholders of struggling Toshiba Corp. Thursday slammed management for a disastrous plunge caused by the company’s failed nuclear gamble, questioning whether the 142-year-old conglomerate can survive the aftermath.
“Do you remember last year’s shareholders meeting? (Toshiba said) nuclear power and flash memory would be two core businesses,” a Toshiba investor said at an emergency shareholders meeting held in Chiba’s Makuhari Messe. “Westinghouse was not a core but a hole, and Toshiba fell right in.”
The irate shareholder lamented that a company with a storied history like Toshiba has found itself in a grave financial crisis, with a negative equity position due to massive losses from Westinghouse Electric Co., its U.S. nuclear unit.
The emergency meeting was held to approve the company’s plan to spin off its flash memory business into a new firm called Toshiba Memory.
Flash memory, commonly used in smartphones, has been a major profit driver, so Toshiba is looking to gain as much as ¥2 trillion by selling shares of the proposed spinoff to bolster its financial foundation.
The plan received a green light at the meeting, but many shareholders who got the chance to speak expressed disappointment and dissatisfaction with the recent debacle.
They criticized the management team for failing to recognize trouble at Westinghouse earlier.
“I understood that Westinghouse was in such a mess,” another shareholder said. “But I’m wondering if Toshiba could have been aware of the situation and implemented some measures.”
In December, Toshiba announced that it would book a massive impairment loss related to the U.S. nuclear business, since Westinghouse was facing mounting cost overruns as a result of construction delays in Georgia and South Carolina.
“We are deeply sorry to keep causing trouble to our shareholders,” Toshiba President Satoshi Tsunakawa said.
Aiming to stem further losses from the overseas nuclear unit, Toshiba announced Wednesday that Westinghouse filed for Chapter 11 bankruptcy protection with $9.8 billion in liabilities.
Toshiba’s net loss for fiscal 2016 may balloon to a staggering ¥1 trillion, since it might have to pay ¥650 billion of parent-company guarantees to the U.S. utility firms that ordered the reactors, the company said.
Tsunakawa vowed to rebuild Toshiba by focusing on social infrastructure and electronic devices.
Shareholders appeared unconvinced.
“My biggest question is that you, Toshiba’s executives, came here today with what level of commitment?” one shareholder said. “I don’t see high levels of commitment from you.”
Another shareholder said that unless Toshiba drastically changes its management team, including the CEO, the company won’t be able to rebuild itself.