By: Azhar Azam
Toshiba Corporation has received yet another notice from the Tokyo District Court for compensatory damages in relation to its accounting scandal, the company announced on its website today.
A total of 97 foreign institutional investors had filed claims of 33 billion yen ($291 million) as compensatory damages against Toshiba on September 6 on account of damages incurred due to company's inappropriate accounting.
As of December 26, the company has been served with 34 complaints in all and a total of about 173 billion yen ($1.5 billion) has been sought in these actions.
Hitherto, Toshiba Memory Corporation (TMC) and Western Digital Corporation (WDC) agreed to mutually resolve their long-boxed legal dispute over sale of Toshiba semiconductor known as NAND flash memory chips business.
These memory chips are vital in the manufacturing of most-modern devices such as smartphones, gaming machines, and data servers. The settlement between the two firms will authorize WDC to invest in chip production and ensure chip supply.
Toshiba will retain 40% stakes in the production unit.
Earlier this year, US technology firm drove Toshiba into litigation after the scandal-hit company announced the sale of its prized chip business to recover financial losses in Westinghouse nuclear division.
Western Digital argued that Toshiba needs its consent for selling out its flash memory business over joint venture partnership between the two companies – a proclamation scandal-hit Toshiba denies.
The global settlement agreement would relieve cash-strapped Toshiba to sell its memory chip business for $18 billion to a consortium led by Bain Capital including Toshiba’s $3.1billion investments and stakes from Apple, Seagate, Dell, Kingston, and others.
In November, the market flooded with the rumors that Toshiba is going to sell its PC business to AsusTek Computer after it announced to sell its television business – Toshiba Visual Solutions (TVS) – to Chinese Hisense Group for $113 million.
Immediately the Japanese company issued a press release that neither the reports to selling of PC business are grounded nor it is in discussion with any individual company for such a deal.
March last year, the company has also agreed to transfer 80.1% stake in Toshiba’s Home Appliances to Midea Group for $473 million and licensed Midea to use Toshiba brands for home appliance for 40 years.
In the after-shocks of these financial-debacles, Toshiba Corporation recorded a net loss attributable to shareholders of the Company $8.6bn in 2017 due to loss of $11.1bn generated in its several companies.
The company also logged a loss of ¥460.0bn in 2016. As a result, nearly 23% (over 45,000) employees lost their jobs in just two years. The employee headcount was 153,492 – down from 198,741 in 2013 – as of March 31, 2017.
This entire watershed ignited when Toshiba Corporation was forced into business restructuring (Toshiba Rebuilding Initiative) after proven guilty for ‘systematic’ and ‘deliberate’ $1.2bn profit-padding scandal.
Ensuing contentious race between Canon and Fujifilm – Toshiba eventually peddled its medical unit to Canon for ¥665.5bn ($5.5bn) last year to improve deteriorating financial health of the company.
Toshiba Medical Systems Corporation (TMSC) finally announced change of company name into Canon Medical Systems Corporation (CMSC) from January 4, 2018 in a press release.
The Healthcare Systems & Services segment, the Home Appliances business, and the Westinghouse Nuclear Power business are now classified as discontinued operations.
In a build-up to propelling the group into a global healthcare business by integrating the two companies – Canon shared an ambitious plan to target revenue of 5 trillion yen ($44bn) with operating and net profit of 15% and 10% respectively by 2020.
The Japanese conglomerate had revenues of $29.3bn in 2016. New Healthcare division adds to the lines of company’s other businesses – commercial printing, network cameras, and industrial devices to compete a global diagnostic market valued at $32bn in 2016.
Although Toshiba Medical dominates the domestic diagnostic devices market in Japan including CT, MRI, X-ray, ultrasound and nuclear medicine but lags behind Siemens, General Electric (GE), and Philips who dominate roughly 75% of the global market.
However, the company is vying to become second-largest supplier of Computed Tomography (CT) systems globally and also the fourth-largest Magnetic Resonance Imaging (MRI) systems in the world.
Canon is also ogling at software developers to compete in Information and Communications Technologies (ICT) market, a digital data detonation, to expand its newly incorporated healthcare business. The so-called ‘data healthcare’ has transformed the diagnostic industry in the past few years.
Much littler in revenue generation to peer companies, Canon is steering to maintain the domestic dominance, strengthen base in US and European countries and capitalize the growth in emerging countries.