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Shares in Toshiba fell as much as 4.2 per cent shortly after the Tokyo open on Tuesday as investors absorbed the implications of a Nikkei story claiming that the troubled nuclear and electronics conglomerate would issue a “business risk warning” later in the day.

The Nikkei story landed on what was already a nervous day: in late December, when Toshiba first flagged-up the potential for a huge, undisclosed but definitely multi-billion dollar write-down arising from its nuclear business, it set February 14 as the date it would inform the market precisely how bad the situation was. Since then, the shares have tumbled as the market has priced-in the stream of leaks and speculation on the likely scale of the problem, writes Leo Lewis in Tokyo.

Brokers said that the market had “basically priced in” the chance that Toshiba will announce a writedown of between $5bn-$6bn, but said that the formal notice of a risk to the company’s future of a going concern was not yet reflected in the numbers.

The warning, should it come, would represent the decision of Toshiba’s auditors to formally cast doubt on the future of one of Japan’s most important and iconic companies – an industrial titan whose diverse businesses interests pervade the country and were historically key to Japan’s development as a modern industrial economy.

The warning, said the Nikkei, would be included in the company’s earnings announcement for the nine months up to December 2016, and due for release at 1200 local time.

The business warning, along with the Nikkei’s line that the company would announce group net losses in the “high ¥400bn range” raises the theoretical prospect that Toshiba, which employs 167,000 people, might not be able to continue as a going concern.

Most analysts suspect that, given Toshiba’s importance as a symbol of Japan, and for its specific role in the decommissioning of the stricken Fukushima Dai-ichi nuclear plant, a deal would ultimately be put together that would keep the core of Toshiba more or less intact. But brokers said that the Nikkei story had significantly raised the volume on speculation in the market that, however ambitious its revival plans, Toshiba’s survival could now depend on the sort of corporate upheaval that would leave it looking nothing like the company investors have come to know.

The company is already receiving bids for a stake in its profitable Nand memory chip business, and is known to be organising the sales of other assets in its huge business portfolio. The company has also talked publicly about dramatically scaling back its overseas nuclear operations – once proudly touted as a core growth driver for the company.

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