Toshiba falls 7 per cent on expectations it will miss reporting deadline

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Shares in Toshiba have fallen nearly 7 per cent as one of Japan’s most established names faces its biggest-ever delisting risk.

The troubled Japanese conglomerate is expected to miss today’s deadline to submit its audited third-quarter earnings amid uncertainty about the true extent of crisis at its US nuclear unit Westinghouse, according to people familiar with the matter.

Toshiba insisted no formal decision has been made regarding a deadline extension for the second time.

The company – which suffered a $1.3bn accounting scandal in 2015 – saw its future once again thrown into doubt after Toshiba said last month that it planned to book a $6.3bn writedown on its US nuclear business.

If Toshiba’s latest deadline extension request is not accepted by the Ministry of Finance division in charge, it will have until March 27 to report the financial results or face delisting.

It also faces a second deadline tomorrow that requires the Japanese group to submit a report to show that it has improved its internal controls after its first accounting scandal. Analysts say convincing regulators that it has improved its internal governance will be extremely challenging amid lingering questions over Westinghouse’s accounts.

Toshiba could be demoted to the Tokyo Stock Exchange’s second section for small cap stocks if it was in negative equity by the end of its financial year on March 31. That is very likely to be the case if the company does not manage to rapidly complete the sale of its prized NAND flash memory business, which is valued as much as $20bn.

If the company remains in negative equity value for two straight fiscal years, it could also be delisted.

Tokyo’s benchmark Topix index is currently down 0.2 per cent.

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