Toshiba plans to write off more than $6 billion and withdraw from building nuclear power plants. The company also announced last week that its chairman, Shigenori Shiga, would resign.
According to a report from the New York Times, Toshiba said it was examining whether managers had acted inappropriately when they struck a deal to buy Westinghouse Electric Co.'s nuclear power business 10 years ago. Westinghouse faces spiraling cost overruns at nuclear plant projects in the United States, the NY Times reported, and Toshiba said that it would like to sell all, or part, of its controlling stake in the company. Previous efforts to offload a portion of its shares in the subsidiary have failed, however.
In that deal, Westinghouse had bought an American construction company it had been using as a contractor at the nuclear plants it was building in the United States. Toshiba’s auditors determined afterward that Westinghouse had overpaid. Delays and cost overruns at the projects meant that the construction company, CB&I Stone & Webster, was saddled with potential liabilities for which Westinghouse had failed to account. Toshiba said lawyers looking into the deal were examining whether senior managers at Westinghouse had exerted “inappropriate pressure” on subordinates who were reviewing Westinghouse’s offer for CB&I Stone & Webster, the Times reported.
Toshiba has struggled to make money in nuclear power since it bought Westinghouse for $5.4 billion in 2006.