Toshiba Corporation, one of the largest electronic companies has been suffering great losses with the year of 2016 being the biggest by far. Toshiba’s liabilities definitely outweighed their assets leading to their demotion to the second tier of the Tokyo Exchange. On top of that, Toshiba needs to get auditors to sign off on its earning statements or else they face the risk of being delisted.
In 2015, an accounting scandal led to the resignation of the chief executive and several senior managers which inflated the previous 7 years’ profits by $1.2bn. They were falsifying their books since 2008 trying to meet ambitious targets that were obviously not met. Profits were inflated and expenses were hidden across the board.
Toshiba needs someone to purchase their computer memory chip business in order to survive. Earlier this week, they chose a consortium led by a Japanese government backed fund as the preferred bidder. The bid totaled to about 2 trillion yen which equals to $18 billion. However, Western Digital of the U.S. disagrees with this deal being that they had already acquired some SanDisk chip operations and it isn’t right to transfer the venture without consent. In hopes of selling this memory chip business, Toshiba is going to settle the deal by a shareholders meeting next week.