An uncertain future for Toshiba as company delists to begin an era of private ownership

When you think about electronic juggernauts, Toshiba is one of those names that come to mind. From computers, TVs, speaker systems to other essential electronics, you’ve probably used something from them at one point.

The Japanese company is now heading into an uncertain future after years of financial trouble caught up with them. It was either going private or declaring bankruptcy.

And after 74 years of being on the Tokyo stock exchange, Toshiba will now begin a new journey under private ownership. A group of Japanese investors led by state-backed Japan Investment Corp (JIC) will take over the firm for $14 billion.

Toshiba’s woes began in 2015 when it was put in the spotlight over accounting malpractices across multiple divisions. It was revealed that for 7 years, top management in the firm had colluded to overstate its profit by $1.59bn.

Further accounting irregularities were discovered in 2020 to add to allegations related to corporate governance and how shareholder decisions were made.

In 2021 things got worse for the electronic maker after it was discovered that they were working with Japan’s trade ministry to discourage foreign investors from entering the market.

Experts investigating the case said that the move pushed the investors away from Japanese stocks in general and it was, therefore, not just a Toshiba problem.

Even as all this was going on, Toshiba was trying to recover from a $6 billion deal with Westinghouse that went wrong after the US firm declared bankruptcy.

Toshiba had to sell off some of its businesses including mobile phones, medical systems, white goods, and its chip unit. The company delisting would have happened sooner if the company hadn’t secured a $5.4bn cash injection from overseas investors.

However, this only caused more rift in the company over who was in charge of decision-making in the company.

JIP has a great record of taking businesses back to profitability and, hopefully, the new owners will help restore the firm to its former glory.