Last Updated on December 21, 2023 by Robert C. Hoopes
Toshiba, the once-prominent electronics brand and symbol of Japan’s dominance in the industry, has been delisted from the Tokyo Stock Exchange, signaling the end of its 74-year history. The downfall of the company can be traced back to 2015 when accounting malpractices worth $1.59 billion were exposed, involving top management.
Since then, Toshiba has been plagued by further accounting irregularities and allegations of corporate governance issues. There were even claims of interference from Japan’s trade ministry to suppress the interests of foreign investors. Additionally, the company suffered a major setback in 2016 when its US unit, Westinghouse Electric, filed for bankruptcy, resulting in over $6 billion in liabilities related to the construction of a nuclear power plant.
To survive financially, Toshiba resorted to selling off various businesses, including mobile phones, medical systems, and white goods. However, these measures proved insufficient, and the company was eventually forced to put its chip unit, Toshiba Memory, up for sale.
In 2017, overseas investors injected $5.4 billion into Toshiba to prevent its forced delisting. This cash injection gave activist shareholders more influence over the company, leading to prolonged paralysis and disagreements about whether Toshiba should split into smaller companies.
Eventually, Toshiba formed a committee to explore the possibility of taking the company private. In 2022, the company received eight buyout proposals and announced that it would be taken over by a group of Japanese investors, led by state-backed Japan Investment Corp, for $14 billion.
The new owners have outlined their plans to focus on high-margin digital services. Japan Investment Corp has experience in separating businesses from large manufacturers and helping them succeed, as demonstrated by their successful acquisition of Sony’s Vaio laptop business in 2014.
The delisting of Toshiba from the Tokyo Stock Exchange marks the end of an era for the once-powerful electronics brand. Despite its troubled history, the company will now embark on a new chapter under the ownership of Japanese investors, with hopes of revitalizing its business in the digital services sector.