Toshiba

The turmoil at Toshiba intensified Tuesday as the conglomerate projected a $6.3 billion writedown, wiping out shareholder equity, and said its chairman had resigned.

Toshiba also delayed its earnings report because of allegations of impropriety, sending its shares down 8% in Tokyo trading. The numbers that were eventually released have yet to be approved by its auditor and Toshiba cautioned investors that a major revision was possible.

The writedown reflects higher-than-expected cost overruns at U.S. power projects handled by Stone & Webster, which Toshiba’s Westinghouse unit acquired in December 2015 from Chicago Bridge & Iron Co. Toshiba had previously warned that it might have to book a charge of “several billion U.S. dollars.”

“The losses have gotten so big that they could topple a company whose roots go back to 1875, the dawn of Japan’s modern era,” The Wall Street Journal said.

Toshiba has also struggled recently with the decline of its consumer business and an accounting scandal tied to about $1.2 billion in overstated operating profits. As a result of the writedown, it now expects a 390 billion yen ($3.4 billion) net loss for the full year.

The company also ended 2016 with negative shareholder equity due to the charge, leaving just a month and a half to find ways to get back above zero before the March 31 fiscal year-end. Shareholder equity totaled only $3 billion in the wake of the accounting scandal.

Toshiba’s executives “have come under intense scrutiny because of the financial mess and the years of flawed business decisions that led to it,” The New York Times noted.

The resignation of one of those executives, chairman Shigenori Shiga, was announced Tuesday. The former Westinghouse boss moved into the position last year in response as the accounting scandal shook up Toshiba’s upper ranks.

“Finally now people are starting to recognize that internal control problems, the accounting issues and governance issues are very real and no longer abstract,” Zuhair Khan, an analyst at Jefferies in Tokyo, told Reuters. “They impact the viability of the company.”

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