Toshiba chairman Shigenori Shiga has resigned today as the firm revealed it expects its business to take a massive hit due to impairment charges on its US nuclear arm.
After unexpectedly delaying its financial update this morning, the company said it expects a 712.5bn yen (£5.01bn) writedown, which would wipe out shareholder equity and drag the company to a full-year loss.
Shiga will step down "to take management responsibility for the loss", Toshiba said.
The firm has estimated a 499.9bn yen net loss for the nine months to December and a 390bn yen net loss for the year ending March 31, compared with a 460bn yen loss a year earlier.
The results have not yet been approved by the company's auditor and have been released as guidance, Toshiba said, while cautioning investors a major revision was possible.
"Finally now people are starting to recognise that internal control problems, the accounting issues and governance issues are very real and no longer abstract," said Zuhair Khan, an analyst at Jefferies, according to Reuters. "They impact the viability of the company."
Toshiba's share price fell as much as nine per cent on news the company had requested to push back its financial results to 14 March, initially saying it was "not ready" and then announcing it needed more time to probe its Westinghouse nuclear business after internal reports uncovered potential problems.
The company said it's received approval to extend the deadline, saying Toshiba "expresses its sincerest apologies to its shareholders, investors and all other stakeholders for any concern or inconvenience caused". The firm said it will "make every effort" to submit its third quarter report by the new deadline.
In 2015, Toshiba twice delayed earnings announcements after it struggled to manage the fallout of a £1.1bn accounting scandal.
Toshiba has previously said it will withdraw from its nuclear plant constructions overseas, including at least a partial exit from its British venture. The firm owns a 60 per cent stake in NuGeneration, or NuGen, a British firm planning to build three nuclear reactors at the Moorside site in Cumbria.
In a statement today, NuGen said: "NuGen acknowledges the announcement that Toshiba’s review into the future of its nuclear power business outside Japan is complete and that it remains committed to developing NuGen’s Moorside Project."
"NuGen will continue to progress plans to develop Europe’s largest new nuclear power station."