Troubled Japanese industrial giant, Toshiba (TOSBF) , took another knock on Tuesday as its chairman stepped down following a decision by the company to suspend the release of its full-year results by a month.
Shigenori Shiga has resigned from his role as chairman but will remain with the company until June as it tries to address challenges at its U.S. nuclear business, Westinghouse.
Toshiba has guided that it will likely post a net loss of around ¥500 billion ($4.4 billion) following a mammoth ¥700 billion write down to the value of Westinghouse.
However, this number could rise before results are published, thanks to an ongoing investigation into the the pricing of an acquisition in the U.S.
Westinghouse, which Toshiba bought for $5.4 billion in 2006, overpaid to acquire a contractor that was working on several nuclear plants for it and now faces having to write down its investment and costs relating to projects that are badly behind schedule and over budget.
It is the Westinghouse acquisition of CB&I Stone & Webster assets that have caused it to fall behind schedule in publishing its financial statements.
"Internal reports were made to Toshiba's audit committee that suggested that internal controls related to the purchase price allocation process for Westinghouse's acquisition of CB&I Stone & Webster were inadequate," Toshiba said in a statement on Tuesday.
"On January 28, managers at Westinghouse indicated concerns that senior management at Westinghouse was exerting inappropriate pressure in order to advance the PPA process."
Toshiba has hired lawyers from Nishimura & Asahi to investigate whether there was any wrongdoing on the part of Westinghouse management during the acquisition.
Toshiba bet on nuclear power and bought Westinghouse originally as part of an effort to diversify away from its volatile and evolving electronics business. But since the acquisition, Westinghouse has done little but create problems for the Japanese conglomerate after the Fukushima nuclear disaster dented Japan's appetite for nuclear fuel and a key new nuclear reactor proved difficult to implement and failed to gain traction.
Toshiba now faces a choice between continuing to sink money into a venture that has already forced it to place part of its core business up for sale, and cutting its losses. It will update the market again before March 14.
The stock had not long recovered from the accounting scandal of 2015 that saw the company delay the release of its financial statements for four months and ultimately book a record loss of ¥479.4 billion.