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Toshiba’s Chairman Resigns as Its Nuclear Power Losses Mount

A Toshiba spokesman at the company’s headquarters in Tokyo on Tuesday. The company said its chairman, Shigenori Shiga, would resign to take responsibility for a $6.3 billion loss.Credit...Toru Hanai/Reuters

TOKYO — Toshiba, the embattled technology conglomerate, said it planned to write off more than $6 billion and withdraw from the business of building nuclear power plants as the impact of a disastrous bet on American nuclear energy continued to rock a mainstay of corporate Japan.

The company also said on Tuesday that its chairman, Shigenori Shiga, would resign, ending weeks of speculation.

Its executives have come under intense scrutiny because of the financial mess and the years of flawed business decisions that led to it. The company said it was examining whether managers had acted inappropriately when they struck a deal to buy a company at the center of the problems.

The trouble stems from Toshiba’s management of Westinghouse Electric Company, the American nuclear power business it acquired a decade ago. Westinghouse faces spiraling cost overruns at nuclear plant projects in the United States, and Toshiba said on Tuesday that it would like to sell all, or part, of its controlling stake in the company. Previous efforts to offload a portion of its shares in the subsidiary have failed, however.

“If we can find the right partner, we want to move in that direction,” said Satoshi Tsunakawa, Toshiba’s president. “Every possibility is on the table.”

Toshiba warned in December that it would most likely need to declare “several billion U.S. dollars” in write-downs at the nuclear unit. On Tuesday, it put the size of the loss at 712.5 billion yen, or about $6.3 billion, which was near the top of analysts’ estimates.

Initially, it looked as though Toshiba might postpone the reckoning altogether.

Early on Tuesday it asked Japanese regulators to extend a noon reporting deadline for a month, to March 14.

A few hours later, it abruptly disclosed the write-down, along with its most recent quarterly results, though it said the numbers represented an updated internal assessment, not the final figures it would eventually file to stock market regulators.

Explaining its request to delay filing the official financial statements, Toshiba said it needed additional time for lawyers to examine an acquisition by Westinghouse that is at the center of the planned write-down.

In that deal, completed in 2015, Westinghouse bought an American construction company that it had been using as a contractor at the nuclear plants it was building in the United States.

Toshiba’s auditors determined afterward that Westinghouse had overpaid. Delays and cost overruns at the projects, they said, meant that the construction company, CB&I Stone & Webster, was saddled with potential liabilities for which Westinghouse had failed to account.

On Tuesday, Toshiba said lawyers looking into the deal were examining whether senior managers at Westinghouse had exerted “inappropriate pressure” on subordinates who were reviewing Westinghouse’s offer for CB&I Stone & Webster.

The company did not elaborate, saying only that the managers’ actions may have circumvented “internal controls.” It said lawyers were “carrying out an additional investigation” and interviewing employees at Westinghouse.

Toshiba has struggled to make money in nuclear power since it bought Westinghouse for $5.4 billion in 2006.

Reactors that the company is building in the United States — at the Virgil C. Summer nuclear station in South Carolina and the Alvin W. Vogtle nuclear plant in Georgia — are about three years behind schedule and billions of dollars over budget. Plants in China are also taking longer than planned to complete.

Mr. Tsunakawa, the president, said Toshiba had approved Westinghouse’s purchase of CB&I Stone & Webster in the hope that, by integrating the contractor’s operations with its own, it could improve efficiency and reduce the cost overruns in South Carolina and Georgia.

But the savings never materialized, and Westinghouse ended up having to cover even more of the costs that otherwise would been borne by CB&I Stone & Webster.

Toshiba’s stock market value has shrunk by half since its warning about the loss from Westinghouse in December. In anticipation of the write-down, Toshiba said last month that it planned to sell its profitable microchip division. It also said it was re-examining the future of its nuclear business. Toshiba stock had dropped about 10 percent by midday Wednesday.

The company said on Tuesday that it would stop bidding for contracts to build new power plants and that it would refocus on servicing existing plants and on reactor design. The servicing accounts for about 80 percent of its nuclear business and is more reliably profitable than construction, Mr. Tsunakawa said.

Westinghouse has been marketing an advanced reactor design known as the AP1000 and had set a target of selling 45 units globally by 2030. Mr. Tsunakawa said it would complete eight reactors that it has under construction and would go ahead with others it has proposed — in places like India and Britain — if it could find partners willing to take responsibility for building them.

“But the number will obviously decrease” from the target of 45, Mr. Tsunakawa said.

Follow Jonathan Soble on Twitter @jonathan_soble.

A version of this article appears in print on  , Section B, Page 3 of the New York edition with the headline: Toshiba’s Gamble on Nuclear Plants Claims Chairman. Order Reprints | Today’s Paper | Subscribe

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