In 140 years of the history the company became multinational corporation and was among the largest global manufacturers of electronics and electrical equipment.
By June, 2020 Toshiba Group published detailed information on reorganization of the structure which the company intends to begin in 2019 financial year, within consolidation policy of divisions and simplification of a hierarchical structure. Reorganization and consolidation of business divisions in the key companies of group is supposed:
- Toshiba Energy Systems & Solutions Corporation. A task - to become one of the leading world companies working in the field of the cyberphysical systems (CPS). Such companies can collect data from the physical world for the analysis in the virtual world of digital technologies, and then use them for extraction of benefit through a permanent feedback between them. The company includes division of power generating systems (Power Systems Division) and division of network aggregation (Grid Aggregation Division).
- Toshiba Infrastructure Systems & Solutions Corporation. The division of the social systems (Social Systems Division) is a part of the company.
- Toshiba Electronic Devices & Storage Corporation. The company includes division of system devices (System Devices Division) and the European division of Toshiba Electronics Europe (TEE).
- Toshiba Digital Solutions Corporation. The company includes the division of solutions ICT (ICT Solutions Division) working in the field of solutions of artificial intelligence and Internet of Things.
Also, after sale of division of Toshiba Memory, the company saved a share of 40.2% in the new company Toshiba Memory Corporation (TMC) created based on this division.
Main article: Financial performance of Toshiba
2019: Net losses - 114.6 billion yens
For 2019 financial year which for Toshiba came to the end at the end of March of the 2020th calendar the Japanese conglomerate gained 3.39 trillion yens ($31.05 billion) that for 8.2% exceeds an indicator of year prescription thanks to revenue growth in much divisions.
Net loss of corporation appeared to equal 114.6 billion yens ($1.05 billion) against the profit of 1.013 trillion yens recorded the previous year. However, that large profit is connected with one-time inflow of income — from sale of a controlling stake of semiconductor division of Toshiba Memory.
According to the statement of Toshiba, in 2019 financial year the company suffered losses from sale of the gas and semiconductor business. Except for special factors, such as costs for restructuring and influence of a pandemic of COVID-19, profit on the primary operating activities doubled — to 161.6 billion yens.
In division of Energy Systems & Solutions in 2019 to a fiscal year revenue in the amount of 568.8 billion yens against 652.7 billion yens was registered the previous year. In the direction of Infrastructure Systems & Solutions the annual turnover increased from 733.5 up to 735 billion yens.
Construction business of Toshiba (the division of Building Solutions is responsible for it) in 2019 financial year showed revenue in the amount of 570.1 billion yens that exceeds the indicator of year prescription equal to 733.5 billion yens.
Sales in division of Retail & Printing Solutions year on year increased from 485.4 to 490.4 billion yens. In division on release of electronics and devices for data storage of sale were reduced — from 933 billion yens in 2018 reporting year to 745.6 billion yens a year later. One more business — Digital Solutions — recorded small decrease in revenue according to the results of 2019 financial year, it made 252.4 billion yens.Financial statement of Toshiba 2019
Business in Russia
Main article: Toshiba Rus
2020: 4-day week and less office workers. As Toshiba will work after a pandemic
On May 5, 2020 it became known that upon termination of the quarantine connected with spread of a coronavirus of COVID-19, Toshiba will transfer about 10 thousand employees in Japan working at production sites to 4-day business week.
The company is going to resume work of the plants in Japan not earlier than June, 2020. At the same time duration of the working days will increase in order that the monthly number of working time — 160 hours — remained the same, and the salary of workers did not decrease. Such is result of negotiations of the company with local labor unions.
In total at Toshiba in Japan about 76 thousand people work. The remained 66 thousand are the employees who are not connected with production.
Reduction of number of the people coming to work and the number of trips to the enterprises is a part of wider measures which Toshiba undertakes for control of spread of a coronavirus.
Toshiba suspended activity of the Japanese divisions from April 20, 2020 to May 6, 2020, having postponed summer vacation to the long period of the spring days off which are referred to as Gold week. When on May 7, 2020 Toshiba resumes work, for some employees will be will enter the flexible working schedule.
So, for example, engineers who process large volumes of design data cannot carry out completely the tasks, being at home. A new system will allow them be more rare at office.
The administrative personnel and sales managers will continue to work remotely, from the house. When they are able to go back to the work, in the company did not specify.
Mass layoffs within restructuring
On May 13, 2019 Toshiba announced mass layoffs within the restructuring directed to recovery of financial health of the Japanese giant.
Toshiba told about liquidation of working positions in the document in which the reporting for 2018 financial year is reflected. According to promulgated materials, by the end of March, 2019 823 employees left, having agreed to the early retirement plan.
Also Toshiba intends to reduce 350 jobs in semiconductor business which suffers because of decline in demand for chips in China. Until the end of March, 2024 it is going to dismiss in total 7 thousand people.
After scandal with accounting frauds and bankruptcies of child Westinghouse Electric the Toshiba company rebuilds the activity. Several assets were sold and measures for cost reduction are implemented, however the technology giant still looks for new drivers of revenue growth after sale of profitable semiconductor business.
Though the corporation had voting share in the sold "daughter" of Toshiba Memory, the Japanese giant ceased to pay it attention. Instead it focused on power and infrastructure products and also on an electronic equipment. Besides, new business on production of Li-ion rechargeable batteries for cars was started.
Toshiba carries out restructuring because of which sales to the company are reduced, however it should improve profitability, the chairman of the board of directors and the CEO of the company Nobuaki Kurumatami said.
Within restructuring of Toshiba offered the list of candidates for board members, including seven new independent and five international board members. These candidacies will be considered at annual shareholder meeting on June 26, 2019.
Reorganization of structure
On January 15, 2019 Toshiba Group published detailed information on reorganization of the structure which the company intends to begin in 2019 financial year, within consolidation policy of divisions and simplification of a hierarchical structure.
1. Creation of Department on development of the new directions of business
The department will perform two complementary functions: acceleration of business development at the expense of own technology assets and financing of active studying of external resources, information search and receiving expert evaluations using fund of a corporate venture capital (CVC). The CVC fund makes 10 billion yens (more than 92.5 million US dollars). These funds will be allocated for investment of startups in Japan and abroad in those areas where the synergy effect with participation of the growing business of Group — for example can be reached, in power, logistics and medicobiological sciences — and also in venture funds with work experience in these sectors.
2. Reorganization and consolidation of business divisions in the key companies of group
Toshiba Energy Systems & Solutions Corporation company
The project team on development of digital transformation of architecture of business (Business Design Project Team) will integrate resources of all divisions of the company in Toshiba Energy Systems & Solutions Corporation and will promote acceleration of development of the businesses connected with transition to digital technologies.
This step will be approved with the strategy of Toshiba Group directed to becoming one of the leading world companies working in the field of the cyberphysical systems (CPS). Such companies can collect data from the physical world for the analysis in the virtual world of digital technologies, and then use them for extraction of benefit through a permanent feedback between them.
On April 1, 2019 the Toshiba Energy Systems & Solutions Corporation company will integrate in the structure Division of systems and services in the field of nuclear power engineering (Nuclear Energy Systems & Services Division) and Division of systems and services in the field of thermal and hydropower (Thermal & Hydro Power Systems & Services Division) in the created Division of power generating systems (Power Systems Division). In turn the Division of transmission systems and distribution of energy (Transmission & Distribution Systems Division) and Division of aggregation of energy (Energy Aggregation Division) will be joint in Division of network aggregation (Grid Aggregation Division).
Компания Toshiba Infrastructure Systems & Solutions Corporation
The Toshiba Infrastructure Systems & Solutions Corporation company will perform consolidation of Division of the water systems and the environment (Water & Environment Systems Division) and Division of the social systems (Social Systems Division) in Division of the social systems (Social Systems Division). These two divisions already work at a basis of the general basic technologies, sales channels and service maintenance that will promote optimization of both the business, and a management structure.
Toshiba Electronic Devices & Storage Corporation company
The Toshiba Electronic Devices & Storage Corporation company will perform consolidation of Division of the digital-to-analog IC (Mixed Signal IC Division) and Division of logical large-scale integrated circuits (Logic LSI Division) in Division of system devices (System Devices Division). As a result of consolidation large-scale integrated circuit technologies of the analog and digital systems which in parallel developed in the relevant divisions will be integrated. The company will strengthen management by sharing and redistribution of resources of development, thus, strengthening core business and promoting more effective use of the general functions.
Toshiba Digital Solutions Corporation company
The Toshiba Digital Solutions Corporation company will integrate in the structure Division of the state and public solutions (Government & Public Corporation Solutions Division) and Division of solutions for the industry (Industrial Solutions Division) in Division of solutions ICT (ICT Solutions Division). The company will use more effectively resources for artificial intelligence technologies and Internet of Things and also to advance achievements in the field of CPS and transition to digital technologies.
3. Reorganization and closing Division on materials and devices
Toshiba will undergo the business, production operations and the affiliated companies of group managed by Division on materials and devices (Materials & Devices Division) in the relevant departments of Group for the purpose of strengthening of their activity and ensuring fast decision making.
Disposal of troubled assets and dismissal of 7 thousand people
On November 8, 2018 Toshiba announced sale of troubled assets and reduction of 7 thousand jobs that it corresponds to 5% of the state. The program of dismissals will be executed within five years.
The Japanese conglomerate sells business in the field of the liquefied natural gas (LNG) in the USA to the Chinese gas company of ENN Ecological for $15 million. However after the closing of the transaction planned until the end of March, 2019, Toshiba will have to transfer to ENN about $821 million as the obligation for acquisition of 2.2 million tons of LNG within 20 years at Freeport LNG company in Texas. The total cost of the contract is $7 billion.
|The project represents huge risk because nobody knows what will be a situation in 20 years — the CEO of Toshiba Nobuaki Kurumatani told journalists.|
Toshiba already considered expenses on an entry from LNG business in the USA in financial statements for the first half of financial year. As notes Reuters news agency, Toshiba spent years to sell gas to clients in the field of power or to get rid of business.
Also Toshiba announced liquidation of the British nuclear division of NuGen. This project assumed construction of the NPP Moorside in Britain, and the solution of Toshiba raises doubts in the relation of further plans of the country to use new atomic energy for replacement of power capacities which will be lost because of closing of coal power stations which will be closed in the next years.
The statement for mass layoffs, disposal of assets and also for plans to redeem up to 40% of shares favorably affected the quotations of Toshiba. On November 8, 2018 stocks of the company rose in price for 12.7%, data of Tokyo Stock Exchange demonstrate. In the course of biddings rise in quotations reached 13.7% — the highest mark for two previous years.
The updated concept of "Essence of Toshiba"
On September 26, 2018 the Toshiba corporation submitted the updated concept of "Essence of Toshiba" containing the rethought purposes and values.
The concept will be applied in scales of all group within an initiative of harmonization and integration of the various enterprises and processes worldwide.
The concept of "Essence of Toshiba" was submitted to the staff of corporation on July 1, 2018. Since October 1, 2018 it will be applied in all divisions of group together with the updated visual images. Rebranding will be performed within the global advertizing campaign, the updated digital and social strategy and also a full range of the branded communication materials.
|We believe in Toshiba that these strategic steps will help us to lay the reliable foundation for future prosperity. The updated concept reflects our aspiration to make a significant contribution to creation of the world which will be safer and more net and society which will be at the same time steady and dynamic. We want to make life of people comfortable and interesting, giving answers to questions which bring closer bright future.|
Ichiro Hirata, corporate vice president
Withdrawal of 3.4 million power supplies because of ignition
In June, 2018 the Toshiba company announced a global withdrawal of power supplies for computers. It turned out that devices are subject to overheating and ignition.
Under a service campaign more than 3.4 million power supplies for Dynabook notebooks and other PCs got. These products are made during the period from December, 2009 to July of the 2011th and sold in Japan, the USA, Europe and other regions. The defective products have model designations G-71C0009S210, G-71C0009T110, G-71C0009T210 or G-71C0009T116.
Over 517 thousand recalled adapters of a power supply were the share of the Japanese market. At the same time it is not specified who the producer of poor-quality products.
According to the Kyodo agency with reference to the statement of Toshiba Client Solutions, in three years since May, 2015 is registered 11 cases of smoke and ignition of power supplies. In these incidents victims it was not announced.
According to the statement of the producer, the power supplies which got under responses can have insufficient water resistance and flare up because of decomposition of components. Toshiba began to change faulty computer component parts for new safe. Replacement is performed free of charge for clients.
Cases of overheating of adapters of a power supply which led to a mass withdrawal of products of Toshiba happened earlier. So, in September, 2010 the Japanese producer of electronics announced need of repair of 41 thousand Toshiba Satellite T123, Satellite T135D and Satellite Pro T130 notebooks sold in the USA from August, 2009 to August of the 2010th. The response was begun after 129 cases of overheating and deformation of plastic around the power connector were recorded. Including in two cases consumers got small burns, and in two small damage was caused to the property of owners of notebooks.
Sale of computer business of Sharp company for 4 billion yens
At the beginning of June, 2018 the Japanese producer of consumer electronics and displays of Sharp announced purchase of computer business of Toshiba, thereby having returned on the market which abandoned eight years before.
Sharp agreed about acquisition of a 80.1 percent share in division of Toshiba Client Solutions which is engaged in development and sale of notebooks, for 4 billion yens (about $36.47 million at the rate of for June 5, 2018). It is going to close the transaction till October 1.
As notes Reuters news agency, this transaction underlines recovery of Sharp under control of Foxconn which purchased the Japanese company in 2016. It is expected, that cooperation with Foxconn will help Sharp to make portable PCs at the reduced prices concerning competitors that will increase demand and will make profit.
The agreement between Sharp and Toshiba is unusual as the Japanese companies, on the contrary, abandon the PC markets, smartphones and consumer electronics, including TVs, under the pressure of South Korean and Chinese competitors.
Toshiba sells notebooks and tablets for corporate clients and consumers under the name of Dynabook. In three financial years by the end of March of the 2018th calendar computer business of the company saved up operating losses in the amount of 97 billion yens, and sales were reduced by 75% because Toshiba ceased to sell the PC abroad and brought production of these products to outsourcing, Bloomberg tells.
Toshiba continues to sell assets after the losses received as a result of accounting scandal and write-offs in nuclear business. So, the Japanese conglomerate sold businesses on release of TVs, home appliances and semiconductors. According to the statement of Toshiba, the corporation places emphasis on such sectors as power and social infrastructure now.
Nobuaki Kurumatani is the new CEO
Sale of Westinghouse for $4.6 billion and its debts for $2.16 billion
In January, 2018 the investment corporation Brookfield Business announced acquisition at Toshiba Corp. 100% in Westinghouse company for $4.6 billion. The transaction approximately for $1 billion will be financed at the expense of equity, for $3 billion — due to long-term debt financing. Completion of the transaction is expected in the third quarter 2018 and is subject to court approval on bankruptcies and other regulators.
In January, 2018 it became known that Toshiba Corp. will sell rights to claim on assets of bankrupt American "subsidiary" of Westinghouse Electric to consortium of investors led by the American hedge fund of Baupost Group and also the stock of the companies connected with Westinghouse to Brookfield investment fund.
As reported in the press release Toshiba, the company will sell rights to claim on assets with a total amount about $8.1 billion for $2.16 billion Toshiba expects to close this deal by the end of January, 2018.
All stocks of the companies connected with Westinghouse, including stocks of its holding company in the USA owned by Toshiba will be sold to Brookfield, probable future owner of Westinghouse, for $1.
Toshiba expects to sell Brookfield shares of the companies connected with Westinghouse until the end of March, 2018.
Sale of requirements of assets of Westinghouse will be reflected in the reporting of Toshiba for the current financial year that will lead to increase in its equity approximately for 410 billion yens ($3.68 billion).
Earlier the company predicted that for the end of this fiscal year which is coming to the end in March, 2018, its equity will be negative - 750 billion yens.
However thanks to the recapitalization in the amount of 600 billion yens which is carried out in December, 2017 due to new share issue and also increase in the capital due to sale of requirements of assets of Westinghouse, Toshiba calculates that its equity on the end of the year will be positive. It, as expected, will allow it to avoid delisting of actions.
Redemption of 10% of stocks of Westinghouse from Kazatomprom
In December, 2017 it was announced that Toshiba redeemed from the national atomic company (NAC) of Kazakhstan Kazatomprom of 10% of stocks the child bankrupt company Westinghouse Electric according to the term of the contract about the put option, the press service of Kazatomprom reported.
Kazatomprom acquired shares of Westinghouse in 2007 at Toshiba corporation for $540 million. According to terms of the contract about the put option, Kazatomprom had the right to sell the shares back of Toshiba corporation at the fixed cost of $522 million.
"Today Kazatomprom received payment for stocks of Westinghouse in the amount of 522 million dollars by earlier exercised right to the put option", the statement says.
In the press release it is emphasized that taking into account the dividends received for the period holding of shares in the amount of 103 million dollars, Kazatomprom performed return of invested funds in the total amount of 625 million dollars that exceeded the initial stock investment of Westinghouse for 85 million dollars.
On November 14, 2017 Toshiba announced sale of television business to the Chinese producer of Hisense Group electronics. The Japanese conglomerate continued to get rid of assets to redeem the undermined financial position.
According to Agence France Presse with reference to the statement Toshiba, the company sells 95% of shares of the division of Toshiba Visual Solutions specializing in release of TVs and also audio-and video equipments. Hisense agreed to pay for it 12.9 billion yens ($113.6 million). Toshiba reserved the remained 5 percent share of business.
Commenting on the transaction, Toshiba called it a part of the "structural reforms" directed to strengthening of "financial base" of corporation.
|It became difficult to Toshiba to continue to put the organizational resources and to implement measures for gain of competitiveness of television business, said in the statement of the Japanese giant.|
Toshiba went to a deep loss after multi-billion write-offs in the American nuclear business. As a result the net value of company assets was negative, threatening the producer with a withdrawal of actions from Tokyo Stock Exchange and the subsequent even more serious financial problems. Not to allow delisting, Toshiba decided to sell semiconductor business for $18 billion, under control Swiss producer of Landis+Gyr counters, and now and TV-division.
For financial year which came to the end at the end of March of the 2017th calendar Toshiba delivered 700 thousand TVs. Revenue of Toshiba Visual Solutions made 43.7 billion yens ($384 million), losses — 6.14 billion yens ($54 million), Nikkei Asian Review tells.
The representative of Toshiba said to the edition that the transaction on sale of Toshiba Visual Solutions which is going to be closed by February, 2018, does not assume reduction of the staff of this division (totals about 700 people).
Government structures of Japan and Bain Group redeem business of semiconductors of Toshiba for $18 billion. The company has 40% in the new company
On June 20, 2017 Toshiba told the name of the preferable buyer of its semiconductor business consortium from the Japanese government investors and Bain Group company. Transaction amount ~ $18 billion.
As a part of consortium the public investment fund Innovation Network Corporation of Japan (INCJ), Development bank of Japan (Development Bank of Japan), bank from Mitsubishi UFJ Financial Group financial group and also the private investment company Bain Capital and South Korean producer of chips of memory SK Hynix Toshiba.
But Toshiba had 40.2% share in the new company created based on this division. Read more here.
Selection of core businesses in separate companies
As of April, 2017 Toshiba consists of the following main divisions:
- Energy & Infrastructure (utilities equipment, transport systems);
- Community Solutions (POS terminals, elevators and other equipment for use in buildings);
- Electronic Devices & Components (hard drives, semiconductors);
- Lifestyle Products & Services (computers, washers, refrigerators, cameras).
On April 24, 2017 Toshiba announced the restructuring assuming department of core business of corporation in the new companies. Reorganization will begin in the summer.
In July, 2017 the divisions of Toshiba which are responsible for release of electronics, information and communication solutions and also for projects of social infrastructure (for example, construction of the railroads and installation of the systems of water purification), will become new legal structures, for 100% under control of the Japanese conglomerate. In October the same will happen to energy business of corporation.
The producer calculates that restructuring will make the separated directions more flexible, and they will receive more freedom for implementation of new opportunities, and duties of heads will become more clear. Separate companies will be directly accountable to the market and clients, reported in Toshiba.
However observers of the Nikkei edition state other reason of restructuring. The matter is that at Toshiba the term of actions of some licenses for construction comes to an end. The company releasing the equipment for infrastructure and electricity generation should get new permissions each five years. Licenses are granted to only financially healthy companies, and Toshiba in 2016 sustained multi-billion losses in connection with an overexpenditure of money in the nuclear projects executed by the American child Westinghouse Electric.
Department of core business of Toshiba in the new companies will affect about 19 thousand employees. The corporation promises to save the salaries of the translated workers, however warns that the amount of payments will change depending on efficiency of the new enterprises.
Some employees to whom Nikkei refers are disturbed by the forthcoming restructuring which, according to them, can leave a part of people without work.
The management of Toshiba said that a future is not at the company
On April 11, 2017 the management of Toshiba said that it does not see the future at the company. Huge losses force to sell the Japanese conglomerate assets.
|There is a number of important events and conditions which raise serious doubts in capability of the company to continue the activity on a continuous basis, says Toshiba, made on the occasion of the publication of financial statements.|
In October-December, 2016 Toshiba received net loss in the amount of 647.8 billion yens (about $5.6 billion), and according to the results of the last nine calendar months of the same year monetary losses reached 532.5 billion yens ($4.6 billion). For 2016 financial year which came to the end on March 31 the 2017th calendar the corporation expects a loss at the level of 1.01 trillion yens ($9.2 billion).
Toshiba transferred the publication of the financial statement twice. The third delay could lead to an output of stocks of the company from the exchange in Tokyo therefore the conglomerate provided quarterly data without approval by the auditor — PricewaterhouseCoopers Aarata company. After check financial results, most likely, will be reviewed.
The president of Toshiba Satoshi Tsunakawa apologized for the problems facing the company and called the solution of the auditor not to approve the financial statement "really worthy regrets". According to the head, Toshiba will use the best efforts not to allow leaving of the company from the Tokyo exchange.
Toshiba could not sum up financial results because of problems taking into account multi-billion write-offs in the Westinghouse Electric subsidiary company working in the field of nuclear power. At the end of March, 2017 Westinghouse Electric was declared bankruptcy.
Huge losses of this "daughter" made equity of Toshiba negative. To improve the financial position and not to allow leaving from the exchange, the company is forced to sell assets. On March 30, 2017 shareholders of Toshiba approved sale of semiconductor business. Then the Kyodo news agency announced plans of corporation to sell division on release of TVs.
Start of negotiations on TV-business sale
On April 9, 2017 it became known of the forthcoming sale of TV-business of Toshiba company.
According to information of Nikkei, interest in the transaction showed producer of home appliances Vestel. Was engaged in Vestel in license assembly of TVs under a brand of Toshiba for the European market.
The Chinese companies from Hisense Group can be among candidates (produces the mobile and home equipment).
Experts estimate the amount of the possible transaction at "several hundred millions of dollars". Its end is probable in March, 2018 — the end of financial year of the company.
Bankruptcy of Westinghouse Electric
Restart of computer business
In December, 2016 Toshiba announced restart of computer business. After the juicy financial scandal, mass layoffs in PC division, the Japanese company decided to begin turnings of several product lines and leaving from foreign market of consumer notebooks all over again.
In December, 2016 Toshiba announced a new series of Dynabook V notebooks which, according to one of heads of department of Toshiba Client Solutions Kazuhiko Kashiwagi, marks restart of computer business, transfers the Nikkei edition.
Within reorganization Toshiba began to make independently notebooks at factory in Hangzhou (Province of Zhejiang, China). Before the company cooperated with contract producers of electronics, and exactly thanks to them Toshiba was possible to manipulate financial statements, overestimating own profit within several years.
The enterprise in Hangzhou on whom notebooks of Toshiba for corporate and home users gather has high extent of industrial automation and the advanced system of motivation of workers.
In 2016 Toshiba reduced number of staff in computer division by 40% approximately to 2900 people. At the expense of these measures the company hopes to save the profitable PC-business and expects income in the amount of 1 billion yens ($8.52 million) and revenue at the level of 226 billion yens ($1.9 billion) according to the results of financial year which will come to the end in March, 2017.
Nikkei notes that receiving any profit does not push to an urgent need to contract the PC-business completely. However most market participants consider that the company will hardly be able to earn much from computers, and in case of approach of losses it will probably consider different options.
It is expected that in 2016 financial year of Toshiba will sell 3 million PCs from which third will be focused on a consumer sector. By the end of 2016 the share of the company in global market of computers is estimated at 3%.
The claim from the world's largest pension fund
In June, 2016 the biggest in the world the pension fund filed a lawsuit against Toshiba in connection with accounting frauds which brought down the quotations of the Japanese giant.
The Government Pension Investment Fund (GPIF) organization, whose assets are estimated at $1.3 trillion (the largest indicator among the pension funds), submitted a claim to Toshiba, requiring to exact 900 million yens (about $8.6 million) from corporation. The losses suffered by third-party managing directors of funds GPIF at purchase of shares of Toshiba in 2009 within their second public placement are like that, the representative of fund Shinichirou Mori reported the Bloomberg agency.
|We purchased securities seven years ago. In so many we estimated our losses from ownerships of them — Mori said.|
GPIF became the first institutional investor of Toshiba which filed a lawsuit against corporation. Earlier it was made by about 50 individual investors and also other companies, including Seibu Railway and Livedoor.
The first listening on this case took place on June 21, 2016. Its results do not reveal. Toshiba abstains from comments at the request of the western and Japanese media.
In 2015 the authorities of Japan made investigation according to the results of which it became clear that within several years the management of Toshiba purposely distorted financial performance that led to overestimate of profit more than for $2 billion. Stocks of the company fell in price more than for 40% since April, 2015 when Toshiba was recognized in financial frauds, by June of the 2016th.
Satoshi Tsunakava is the new CEO
On May 6, 2016 Toshiba announced Satoshi Tsunakava's appointment the new head of the company. Replacement of the leadership happens in conglomerate in attempt to recover from crisis which came after scandal with overestimate of profit.
The Board of Directors nominated Satoshi Tsunakava to a post of the CEO and president of Toshiba instead of Masashi Muromachi who headed the company in July, 2015. Shigenori Shiga will become the new chairman of the board of corporation.
Canon purchased medical business of Toshiba for $6 billion
On March 9, 2016 the Toshiba corporation announced sale of medical business to the Japanese producer of the photo and printing equipment of Canon. The cost of the transaction was officially not disclosed, however authoritative media know that it is more than about $6 billion.
The division of Toshiba Medical Systems releasing the equipment for computer and magnetic resonance imaging, the radiographic systems and other solutions for health facilities is subject to sale. Read more here.
Resignation of the president of Hisao Tanaka company
In the middle of July, 2015 mass media reported the preparing resignation of the president of Toshiba Hisao Tanaka in connection with financial scandal in the Japanese corporation.
According to the business publication Nikkei, mister Tanaka already warned the colleagues about intention to resign authority in September, 2015. The name of his successor is not told. Toshiba refrained from informative comments, having said that no decisions were made as investigation of the incident connected with the detected inaccuracies in accounting records still continues.
In the spring of 2015 Toshiba stated that a number of divisions of the company during the period from 2011 to 2013 underestimated expenses on a number of infrastructure projects that led to the overestimated expectations on profit. The special independent committee which began to check activity of Toshiba was created.
According to Nikkei, the commission found out that Hisao Tanaka and the previous president of Toshiba Norio Sasaki who to the middle of 2015 is the vice-chairman of the board of directors of the company instructed the subordinates to delay calculation of losses in a number of infrastructure projects. If participation of top managers is proved, to them not to avoid dismissals. Can announce it after the end of investigation, adds a source.
The sources of Reuters familiar with a situation speak, in connection with the revealed inaccuracies in financial data of Toshiba will be forced to write off at a loss about 300-400 billion yens ($2.4-3.2 billion). The Japanese giant estimated monetary losses at 50 billion yens ($405 million). In 2014 financial year which came to the end in March of the 2014th the net profit of corporation was 51 billion yens. The publication of data for 2015 financial year is delayed in connection with investigation of accounting fraud.
According to media, after the publication of the report independent committee the check there can begin Securities and Exchange Commission of Japan (Securities and Exchange Surveillance Commission, SESC). She will transfer own results to the Financial Services Agency financial regulator of Japan, and that will already make the decision on sanctions against Toshiba.
Record penalty for a reporting juggling
On December 7, 2015 it became known that Toshiba can be fined record for the Japanese market for falsification of financial data.
According to the newspaper The Wall Street Journal, Securities and Exchange Commission of Japan (Securities and Exchange Surveillance Commission, SESC) made the recommendation about imposing on Toshiba of a penalty in the amount of 7.3 billion yens ($59 million). For Japan the amount of this collecting will become the biggest in the history among all incidents connected with accounting violations. However, this amount is scanty in comparison with monetary punishments of the American companies involved in similar financial scandals notes the edition.
It should be noted that the statement of SESC for penalties against Toshiba has advisory nature. For entry into force the Agency of financial services (Financial Services Agency) which, however, often agrees with solutions of the regulator of security market should approve it. Before scandal in Toshiba for the Land of the rising sun the fine of 1.6 billion yens ($12.9 million) paid by industrial conglomerate IHI Corp was record. in 2008 for accounting violations.
The beginning of financial scandal over Toshiba is dated April, 2015. In eight months since that moment of a stock of conglomerate fell in price by 40%. The company was left by several top managers involved in a reporting juggling therefore about $1.9 billion excess profit from 2008 for 2014 were attributed to Toshiba.
Toshiba reserved for settlement of scandal on the accounts 8.4 billion yens (nearly $68 million). This amount can not be enough, considering that on December 7, 2015 50 shareholders of Toshiba filed a lawsuit against corporation of Tokyo, requiring to exact from it about 302 million yens ($2.45 million) for distortion of financial results and false representation of investors.
A claim was submitted against all company, three former heads and two chief financial officers. According to the lawyers representing the party of charge, a total quantity of the security holders of Toshiba who joined the class action can grow till 1000. In June, 2015 a similar claim was submitted to one of the American courts.
Reductions of 6800 jobs
On December 21, 2015 Toshiba announced mass layoffs and a record loss which the company expects according to the results of financial year.
According to the statement of Toshiba to which the The Associated Press agency refers, the company will reduce 6800 jobs in division on release of personal computers, TVs and consumer electronics. Taking into account these dismissals the number of staff of the Japanese corporation will decrease approximately by 3%.
Liquidation of working positions will be performed as in Japan where it is going to start the early retirement plan, and abroad. Toshiba did not specify the volume of reductions in this or that country.
The announced personnel reorganization more will affect television business of the company. In the division occupied with it 3700 jobs will be reduced that corresponds to 80% of a total quantity. Also Toshiba will sell the TV-enterprise in Indonesia.
Besides, sale of a research complex in the suburb of Tokyo and a controlling interest in business on release of the medical equipment which before the corporation called one of the main drivers of growth of the income is planned.
According to the Nikkei edition, will spend about 200 billion yens ($1.64 billion) for carrying out restructuring of Toshiba. Against the background of these expenses the company expects the record loss equal to 550 billion yens ($4.5 billion), according to the results of 12-month reporting period which will come to the end at the end of March, 2016. The previous year net losses were measured by 38 billion yens ($312 million).
Also Japanese conglomerate predicts rather big operating loss in a year — 340 billion yens ($2.78 billion). It means that big monetary losses are connected not only with single expenses on business transformation, but also problems of the company in daily work in the market, The Wall Street Journal notes.
According to the Bloomberg agency, the loss exceeding 500 billion yens which expects Toshiba exceeds the total net profit of corporation twice for the last 20 years.
At the time of closing of Tokyo Stock Exchange on December 21, 2015 which took place to the declaration of losses and reduction of jobs in Toshiba stocks of the company fell in price almost for 10%. Since March, 2015 securities fell in price almost twice.
Identification of grandiose frauds in overestimate of financial performance
Main article: Financial performance of Toshiba
In April, 2015 Toshiba found errors in financial statements and initiated investigation which till August was made by group of independent auditors. They found out that the management of Toshiba purposely distorted financial performance that led to overestimate of profit for 155 billion yens ($1.3 billion) for the seven-year period, since 2008. These are three times more the amounts about which spoke in the company before audit. Profit before taxation was overestimated by 225 billion yens ($1.9 billion), follows from the message of Toshiba of September 7, 2015. Read more here.
2012: Acquisition of a part of business of IBM
The division of Toshiba conducts negotiations with IBM on acquisition of a part of its business on production of POS terminals (Point of Sale Terminal) and cash registers used in shops to settlings with clients for purchases, – the unnamed source reported about it on April 17, 2012 to Reuters. It is known that it has a direct bearing on the preparing transaction.
According to the Japanese newspaper Nikkei business daily (unofficial data), the Toshiba company intends to pay IBM about $870 million or 70 billion Japanese yens. Toshiba will allocate a part of funds from own reserves of cash, a part will take on credit.
Analysts explain so high cost of the transaction with branched base of clients of IBM with an exit to international markets. In particular, it includes the world's largest retail network Wal-Mart Stores and the largest retail network of toys and products for children of Toys "R" Us, the main headquarters of both is located in the USA. At the moment in the market of POS terminals IBM occupies the biggest share in 22% whereas division of Toshiba – only 7%.
If the transaction takes place, the Toshiba Tec subsidiary company half belonging to Toshiba will become the world's largest producer of POS terminals and the associated equipment. She also acts as the producer of cash registers and software for management of retail sales and warehouse activity. Obviously, acquisition will allow Toshiba Tec not only to catch the impressive customer base and to increase presence in the market, but to strengthen technological leadership. The company already offers a number of perspective cloud services for owners of shops, buyers and producers of products.
After dissemination of information about the forthcoming transaction despite the general reduction of the market, share value of Toshiba Tec grew by 7.5% and reached $4.09. Presumably final decision will follow a meeting of members of Boards of Directors of the companies.
2009: Thompson is the first European president in Toshiba Europe
Since July 1, 2009 Alan Thompson is appointed the president of Toshiba Europe. Thompson replaced at this position of Noriaki Hashimoto who after two years of presidency returns to Tokyo. As the president of Toshiba Europe, Thompson headed work of three divisions of the company:
- computer systems (notebooks, mini-notebooks, periphery and accessories),
- consumer electronics (LCD TVs, DVD players and writer devices) and
- storage systems (hard drives for the entertaining systems, players and notebooks).
Thompson's appointment became the beginning of a new stage in development of the Japanese company as for the first time the post of the president will be held by the European.
1939: A company merger in Tokyo Shibaura Electric
In 1939 both companies, each of which was a leader in the area, agreed about merge and created the joint producer of electric equipment which received the name Tokyo Shibaura Denki (Tokyo Shibaura Electric). Soon this company became widely known under the name of Toshiba.
1890: Foundation of the lamp plant Hakunetsusha & Co
In 1890 the entrepreneur to Ichisuke Fujioka founded the Hakunetsusha & Co company which became the first Japanese enterprise for release of electric lamps of incandescence.
1875: Foundation of Tanaka Seizo-sho company
The history of Toshiba began in 1875 – foundation year of Tanaka Seizo-sho company (Tanaka Engineering Works) which became the first Japanese producer of the cable equipment. The founder of the company Hisashige Tanaka was an inventor, famous in Japan. Among its most outstanding inventions – mechanical dolls and hours which do not need to be got.
- ↑ Toshiba to adopt four-day workweek at its manufacturing plants
- ↑ Toshiba posts record profit on chip unit sale, plans extra job cuts
- ↑ Toshiba sheds more assets, cuts jobs to regain investor trust
- ↑ Toshiba recalls 3.4 million AC adapters for computers over fire risk
- ↑ Sharp to Buy Toshiba's Personal Computer Business, License Brand
- ↑ of Toshiba will sell rights to claim on assets of Westinghouse that will increase its capital by $3.7 billion
- ↑ Toshiba sells TV business to China’s Hisense
- ↑ sells semiconductor business for $18 billion. The buyer is for the first time declassified
- ↑ Toshiba admits it may not be able to survive
- ↑ of Toshiba sells the legendary TV-business
- ↑ World’s Biggest Pension Fund Sues Toshiba for Accounting Scandal
- ↑ Toshiba faces of $3 billion in charges over accounting scandal: sources
- ↑ Toshiba Accounting Scandal Draws Record Fine From Regulators
- ↑ Scandal-Hit Toshiba Cuts Jobs, Sells Plant, Projects Red Ink
- ↑ Toshiba Expects of $4.5 Billion Loss for Current Fiscal Year
- ↑ Toshiba Plunges on Reports It Will Post of $4 Billion 2015 Loss