Toshiba – Perhaps the end of an era for the electronics giant

There was a period when Toshiba produced several TVs, laptops, speaker systems, and other necessary technological products.

Japan Inc., a business that served as a symbol of Japan's supremacy in the electronics industry, has been delisted, ending a 74-year association with the Tokyo Stock Exchange.

What happened?

It all began in 2015 when it was discovered that several divisions had engaged in accounting malpractices, many of which included upper management.

Toshiba had been inflating its earnings for seven years by $1.59 billion (£1.25 billion).

Toshiba discovered further accounting anomalies in 2020.

Concerning corporate governance and the process by which shareholder choices were taken, there were also accusations.

As a result of Toshiba's strategic asset status, the Japanese Trade Ministry and Toshiba collaborated to suppress the interests of foreign investors, according to an inquiry conducted in 2021.

Experts at the time claimed that this affected not just Toshiba but also the Japanese stock market as a whole, giving overseas investors pause when considering purchasing Japanese companies.

Toshiba said in late 2016 that it would assume responsibility for several billion dollars associated with the building of a nuclear power station, which it had purchased a year earlier from US company Westinghouse Electric.

After Westinghouse declared bankruptcy three months later, Toshiba was left with over $6 billion in liabilities and the potential loss of its nuclear industry.

It sold off a variety of companies, such as white goods, medical systems, and mobile phones.

Then, due to a disagreement with one of its partners, it was compelled to list its chip division, Toshiba Memory, for sale. The transaction was postponed for many months.

During a period when businesses were making significant investments in technology and innovation, Toshiba needed to obtain money by selling a valuable asset.

Toshiba avoided being compelled to delist by securing a $5.4 billion capital infusion from foreign investors at the end of 2017.

However, it also meant that activist shareholders would have more influence over the company's course.

This resulted in lengthy conflicts that stopped the manufacture of semiconductors, batteries, nuclear power plants, and defence hardware.

Following much debate on whether the corporation should be divided into smaller businesses, Toshiba formed a committee to investigate the possibility of going private.

Toshiba received eight takeover bids in June 2022.

The business announced earlier this year that it will be acquired for $14 billion by a consortium of Japanese investors headed by the government-backed Japan Investment Corp (JIC).

Although the new owners' strategy for turning around Toshiba is unclear, the company's departing chairman has stated that a priority would be high-margin digital services.

(Sources: bbc.co.uk)