Toshiba warns of ‘substantial doubt’ on staying in business

Toshiba on Tuesday warned of ‘substantial doubt’ about its ability to continue after the struggling Japanese industrial giant failed to convince its auditor to sign off on its third-quarter accounts.

The group, which is reeling from its worst ever financial crisis because of far-reaching problems at its US nuclear subsidiary Westinghouse, took the unusual step of publishing unaudited accounts for the three months to 31 December.

The electronics-to-construction giant reported a loss of 532 billion yen (€4.8 billion) for April to December.

These latest financial results have already been delayed twice and raise the possibility that Toshiba could be delisted from the Tokyo Stock Exchange.

Toshiba's president, Satoshi Tsunakawa, apologised for the problems facing the firm and called the auditor's decision not to approve the financial report as "truly regrettable".

In the middle of its 22-page results statement, Toshiba said: “There are material events and conditions that raise the substantial doubt about the company’s ability to continue as a going concern.”

Westinghouse last month filed for Chapter 11 bankruptcy protection in the US after running up large cost overruns on two flagship projects in the country to build new nuclear power stations.

The impasse between Toshiba and PwC stems from investigations by outside lawyers that were commissioned by the Japanese group and relate to the Stone & Webster deal. Toshiba said last month that its audit committee had found evidence, based on the lawyers’ work, that some senior Westinghouse managers exerted “undue pressure” over the accounting for the deal.