Akihabara News (Tokyo) — Toshiba last month agreed to a ¥2 trillion (US$15 billion) takeover bid from a Japanese consortium led by Tokyo-based Japan Industrial Partners (JIP). This event was the result of numerous scandals and poor decisions by Toshiba management which stretched over a period of decades.
Eight years ago, an accounting scandal thrust Toshiba into global headlines. The company had deliberately overstated its earnings by over ¥220 billion (US$1.7 billion) over the fiscal years 2008-2013.
This scandal led to a financial pinch involving layoffs for nearly 10,000 employees.
But the largest underlying problem for Toshiba was the failure of its nuclear power business. The Japanese firm purchased, at a premium price, US manufacturer Westinghouse Electric as a strategic investment in the industry. However, massive cost overruns in the US market and the sharp change in global public opinion in the wake of the Fukushima Daiichi nuclear disaster in 2011 saddled Toshiba with heavy losses in this sector.
US subsidiary Westinghouse was thus allowed to go into bankruptcy in 2017.
At the end of the same year, Toshiba received a US$5.4 billion infusion of funds from more than thirty foreign investors. But what was supposed to become a new lifeline for Toshiba turned out to be another headache.
The main issue was that these foreign investors and the Japanese management had starkly different views about the best strategies going forward. This led to a number of unseemly and often very public feuds between the investors and management, further damaging the firm’s reputation.
With the JIP takeover, Toshiba is hoping for a more successful rebirth.
Recent Nuclear Energy Related Articles
Developing Safer Nuclear Reactors
Japan Joins British Nuclear Project
Kishida Aims to Expand Use of Nuclear Energy
