Business / Corporate

Trust banks plan ¥1 billion lawsuit against Toshiba

Kyodo

Mitsubishi UFJ Trust and Banking Corp. and an affiliated trust bank plan to sue scandal-ridden Toshiba Corp. for ¥1 billion over losses incurred from a major accounting scandal that sent its share price plummeting, a source close to the matter said Monday.

The potential lawsuit comes as Toshiba scrambles to respond to trouble at its U.S. nuclear business, which is staring at a loss of ¥700 billion, and to find a third party willing to offer a capital injection.

If Toshiba were to lose the lawsuit, it would make its turnaround efforts even more arduous.

Mitsubishi UFJ Trust and affiliate Master Trust Bank of Japan are preparing to jointly file the lawsuit at the Tokyo District Court in late March, the source said.

They are likely to claim they suffered losses from the plunge in Toshiba’s share price caused when the electronics giant’s accounting troubles surfaced in 2015.

Earlier this month, the trust banks began informing clients, including pension funds, about the planned lawsuit.

Those considering filing similar lawsuits include Japan Trustee Services Bank, an affiliate of Sumitomo Mitsui Trust Holdings and Resona Bank, as well as Trust & Custody Services Bank, a subsidiary of Mizuho Financial Group Inc.

The Government Pension Investment Fund has already indirectly sued Toshiba, with Japan Trustee Services Bank, which holds Toshiba shares on behalf of GPIF, seeking damages of around ¥13 billion in a lawsuit filed with the Tokyo District Court.

Toshiba declined to comment on the latest lawsuit report.