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Japanese tech giant Toshiba posted a shocking $8.8 billion earnings loss on August 10 for the last fiscal year. The struggling firm posted its long-awaited results to reduce the risk that it will be delisted from the Tokyo Stock Exchange. Toshiba had postponed the release of its results for months, as it struggled to secure authorization from its auditors.

The results were endorsed by auditor PricewaterhouseCoopers Arata who gave Toshiba a “qualified opinion”. The company has been struggling to recover from a 2015 accounting scandal, in which Toshiba was found to have inflated the previous years’ profits by $1.2 billion. Several members of Toshiba’s senior management resigned following the revelations.

Toshiba took another hit in late 2016 when it was revealed the company suffered billions of dollars in losses at its US nuclear unit Westinghouse. Toshiba acquired the nuclear unit in 2006 when it was looking to expand and diversify away from consumer electronics.

But the acquisition turned sour after global demand for nuclear energy slowed following the 2011 Fukushima disaster in Japan, leaving the company drowning in delays and costs. Toshiba subsequently put Westinghouse into Chapter 11 bankruptcy, protecting the unit from creditors while it goes through restructuring.

To cover its huge losses, Toshiba is trying to sell its lucrative chip business, but the sale hasn’t been straight forward. The company aims to sell the unit to a group of US, South Korean and Japanese investors. But the sale has been challenged by Toshiba’s partner and rival bidder, Western Digital, in court.

Toshiba announced its preferred bidder was a consortium which consisted of Bain Capital, South Korean chip maker SK Hynix and Japanese-government backed funds. Western Digital argued that any sale of the chip business requires its consent and sought an injunction order to block any transaction. Western Digital made it clear to Toshiba that it wants to buy the memory chip business from the Japanese conglomerate.  

Japan’s Ministry of Economy, Trade and Industry (METI) has been trying to orchestrate the sale as part of its plan to keep Toshiba’s semiconductor technology in domestic hands. A US court judge ruled to postpone a decision on Western Digital’s injunction request, and instead proposed that Toshiba give the US firm at least a fortnight’s notice before finalizing any sale of its chip business. 

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