Toshiba, parent of the company planning to build a new nuclear plant at Moorside in Cumbria, has announced a $6.3 billion write-down for its US nuclear subsidiary Westinghouse. Reuters said that would “wipe out its shareholder equity and will drag the group to a full-year loss.”
The company said it would withdraw from nuclear plant construction overseas.
Toshiba had asked for permission to delay by a month its results statement for 3Q 2016, saying the auditor needed more time to review the results and conduct an investigation into whether ‘inappropriate pressure’ had been exerted by managers during the purchase of Stone & Webster by its US nuclear subsidiary, Westinghouse.
As a result the statement came without being signed off by the auditor. Toshiba said its audit committee had reports in January that suggested “internal controls related to the Purchase Price Allocation (PPA) process for Westinghouse’s acquisition of CB&I Stone & Webster were inadequate”. Law firms Nishimura & Asahi, K&L Gates (hired by Westinghuse) began an investigation.
On January 28, Toshiba said, “managers at Westinghouse indicated concerns that senior management at Westinghouse was exerting inappropriate pressure in order to advance the PPA process”.
The company said in respect of the results announcement that, “…although no particular item requiring revision have been found in the consolidated quarterly business report, it was decided yesterday afternoon that additional investigation was required, in order to clarify the existence and the range of its effects of any actual occurrence of management pressure in addition to the facts contained in the internal report.”
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Further reading: Moorside’s Morecambe Bay connection to be first onshore network up for tender