End of an Era for Electronics Giant Toshiba
Japan’s renowned electronics giant, Toshiba, has officially delisted from the Tokyo Stock Exchange, closing a chapter that spanned 74 years and once symbolized the pinnacle of Japan’s electronic dominance.
The downward spiral for Toshiba commenced in 2015 when revelations of accounting malpractices surfaced, uncovering a seven-year overstatement of profits amounting to $1.59 billion (£1.25 billion). The misconduct implicated top management across multiple divisions, tarnishing the company’s reputation.
In 2020, additional accounting irregularities came to light, compounding Toshiba’s woes. Accusations involving corporate governance and allegations of colluding with Japan’s trade ministry further marred the company’s standing.
A pivotal moment came in 2016 when Toshiba faced the fallout from the bankruptcy of US unit Westinghouse Electric, responsible for a nuclear power plant’s construction. With more than $6 billion in liabilities, Toshiba was compelled to sell off various businesses, including mobile phones, medical systems, and white goods.
The critical Toshiba Memory chip unit was also put up for sale, facing delays due to disputes with partners. Despite securing a $5.4 billion cash injection in 2017, Toshiba continued to grapple with challenges, giving activist shareholders more influence in the company’s direction.
The protracted battles over potential splits and considerations of going private led to eight buyout proposals in June 2022. Earlier this year, Toshiba confirmed its takeover by a group of Japanese investors, led by the state-backed Japan Investment Corp (JIC), for $14 billion.
The new owners, including JIC with a track record in business carve-outs from major manufacturers, have not disclosed specific plans for Toshiba’s revival. However, outgoing Chairman Nobuaki Kurumatani hinted at a focus on high-margin digital services.
As Toshiba bids adieu to the stock exchange, uncertainties linger about the company’s future. With approximately 106,000 employees and operations deemed critical to national security, the transition marks a significant shift in the landscape of Japan’s electronics industry.
