In what can be considered a fresh headache for Toshiba Corp as it scrambles to offset a separate imminent multi-billion dollar writedown, the Japanese trust banks are preparing to sue the conglomerate over its 2015 accounting scandal.
On Friday the conglomerate said that in order to raise funds, the company will sell a minority stake in its memory chip business as well as its overseas nuclear division - the cause of its current woes - was now under review. The news about the potential suit against the company comes soon after the former announcements by the struggling conglomerate on Friday.
Local media have also reported that to take responsibility for the upcoming charge, Chairman Shigenori Shiga is ready to step down.
Toshiba’s shares lost 3.7 percent on Monday as the announcements on Friday failed to clear up much of the uncertainty surrounding the company.
"No explanations were offered as to the ultimate scale of the impairment losses to be recorded in the business or how the company intends to control risk going forward," Takeshi Tanaka, an analyst at Mizuho Securities, wrote in a note to clients.
After Toshiba's shares slid in the wake of the accounting scandal two years ago, the pension funds, clients of The Mitsubishi UFJ Trust and Banking Corp, lost money due to the scandal and hence they are seeking 1 billion yen ($8.7 million) in damages, the trusts said in a statement said on Monday. The Banking Corp is a unit of Mitsubishi UFJ Financial Group.
The media reported quoting sources with direct knowledge of the matter but who declined to be identified as they were not authorized to speak to the media, that two other trust banks, Sumitomo Mitsui Trust Bank Ltd and Mizuho Trust & Banking Co are also preparing similar suits.
Representatives for the two banks declined to comment.
Since Toshiba first admitted to reporting inflated profits going back to 2008, the company said that 45 overseas institutional investors filed a suit seeking 16.7 billion yen in damages in October. This claim that has been made is in addition to the total 15.3 billion yen demanded in suits from 15 groups and individuals in Japan.
The Tokyo Stock Exchange have demanded improvement on corporate governance and compliance measures of the company as the exchange, following the revelation of the accounting scandal, it has placed Toshiba on its watch list since September 2015.
Following the measure by the exchange, Toshiba has found itself being nearly impossible to resort to new share issues to raise funds as the exchange has put it on a watch list. In March, the exchange is expected to go through a report to be presented by the company on its internal control measures that it has taken so far.
"Why and how the company has had to book the writedown is a matter of grave concern," Akira Kiyota, the chief executive of Japan Exchange Group, which owns the Tokyo Stock Exchange, told a news conference
(Source:www.reuters.com)
On Friday the conglomerate said that in order to raise funds, the company will sell a minority stake in its memory chip business as well as its overseas nuclear division - the cause of its current woes - was now under review. The news about the potential suit against the company comes soon after the former announcements by the struggling conglomerate on Friday.
Local media have also reported that to take responsibility for the upcoming charge, Chairman Shigenori Shiga is ready to step down.
Toshiba’s shares lost 3.7 percent on Monday as the announcements on Friday failed to clear up much of the uncertainty surrounding the company.
"No explanations were offered as to the ultimate scale of the impairment losses to be recorded in the business or how the company intends to control risk going forward," Takeshi Tanaka, an analyst at Mizuho Securities, wrote in a note to clients.
After Toshiba's shares slid in the wake of the accounting scandal two years ago, the pension funds, clients of The Mitsubishi UFJ Trust and Banking Corp, lost money due to the scandal and hence they are seeking 1 billion yen ($8.7 million) in damages, the trusts said in a statement said on Monday. The Banking Corp is a unit of Mitsubishi UFJ Financial Group.
The media reported quoting sources with direct knowledge of the matter but who declined to be identified as they were not authorized to speak to the media, that two other trust banks, Sumitomo Mitsui Trust Bank Ltd and Mizuho Trust & Banking Co are also preparing similar suits.
Representatives for the two banks declined to comment.
Since Toshiba first admitted to reporting inflated profits going back to 2008, the company said that 45 overseas institutional investors filed a suit seeking 16.7 billion yen in damages in October. This claim that has been made is in addition to the total 15.3 billion yen demanded in suits from 15 groups and individuals in Japan.
The Tokyo Stock Exchange have demanded improvement on corporate governance and compliance measures of the company as the exchange, following the revelation of the accounting scandal, it has placed Toshiba on its watch list since September 2015.
Following the measure by the exchange, Toshiba has found itself being nearly impossible to resort to new share issues to raise funds as the exchange has put it on a watch list. In March, the exchange is expected to go through a report to be presented by the company on its internal control measures that it has taken so far.
"Why and how the company has had to book the writedown is a matter of grave concern," Akira Kiyota, the chief executive of Japan Exchange Group, which owns the Tokyo Stock Exchange, told a news conference
(Source:www.reuters.com)
