Toshiba wins auditor sign-off for now

Toshiba Corp has probably avoided immediate delisting after its auditor signed off on its financial results, albeit with criticism of its governance. But, as Sonia Legg reports, its future remains uncertain with no progress in talks to sell its chips unit for much-needed cash.

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It boasts about leading Innovation but Toshiba’s certainly not leading the markets.
Although it seems to have escaped being de-listed from the Tokyo stock exchange it’s still in a precarious situation.
It needs to sell it’s prized flash memory business to pay for liabilities linked to a failed US nuclear venture.
“We think it is possible to decide on the (memory chip) deal by end-March, so we are doing our utmost to work towards that. Nothing has been decided yet on what happens if we don’t make it in time.”
Toshiba has chosen a government-backed consortium as its favoured buyer.
But its joint venture partner Western Digital is taking legal action over the sale – it wants to buy the chip business itself.
“There are three issues that they have to deal with. First of all they have to backfill the shareholder equity challenge. Secondly they have to ensure that they are able to get through the next audit round. And thirdly they do have to sort out their Western Digital fracas and that is a problem in particular because that has been the principal motive for growth in the current set of results.”

The chips unit accounted for 94 percent of Toshiba’s total operating profit in the second quarter.

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