Toshiba Corp. President and CEO Satoshi Tsunakawa apologized at a news conference on Feb. 14 for a delay in the financially troubled company's announcement of its financial statements. While pointing to the possibility of selling off Toshiba's semiconductor division, the firm's core business field, Tsunakawa did not provide a clear-cut explanation of allegations of wrongdoing against Westinghouse Electric Co. (WH), a U.S.-based nuclear plant subsidiary, saying that the matter is "under investigation."
At the same news conference, Ryoji Sato, chairman of Toshiba's Audit Committee, said the company will spend a month to investigate the alleged wrongdoing at WH.
Excerpts of a question-and-answer session at the news conference follow.
Sato: We've received a report from a whistleblower pointing out deficiencies in internal control in connection with WH's purchase of a nuclear plant construction company. There was inappropriate pressure by an executive at the unit, which could affect our finances. Since we're investigating the allegations, we'd like to refrain from commenting on the details. We'll investigate for one month to get to the bottom of the case.
Question: Why is Toshiba considering selling off its control of the semiconductor division?
Tsunakawa: We've received an offer to buy the division, and we flexibly considered the offer and decided not to stick to our position to retain a majority stake in the division. There's even a possibility of selling off all our shares in the unit.
Question: Toshiba has fallen into a capital deficit. What was the cause of the problems?
Tsunakawa: This is largely attributable to orders for four overseas nuclear reactors we received in 2008. We can't deny that our takeover of WH has contributed to the trouble.
Question: How will you recapitalize Toshiba to eliminate the state of capital deficit by the end of March this year?
Answer: We're taking various measures such as selling off of our assets. However, a large part of an increase in our capital will come from the split of our semiconductor division. We're not considering selling off any other subsidiary in our group.
Question: How will you assume responsibility for the problems as president?
Tsunakawa: I feel a sense of grave responsibility for being unable to announce our financial statements. First of all, I'd like to fulfill my responsibility to deal with the matter.