>> An ominous warning from Toshiba on Tuesday. The troubled Japanese tech giant warning its future may be at risk after it filed earnings for the first nine months of the fiscal year even though they weren't signed off by its auditors. Net loss was worse than expected at nearly $5 billion.
The company has already delayed its earnings twice because its books are in such a mess. And authorities could now force it to delist from the Tokyo Stock Exchange. Reuters Breakingviews Asia Editor Quentin Webb is following this story.>> In order to avoid a delisting, Toshiba has to prove that it has sufficient quality internal controls.
But it's very hard to argue after 18 months of scandal and increasingly big losses that they are really kind of in control of what's going on there. If you can't file your audited reports twice in a row, and then for a third time you still can't do it.
If you seem to be almost kind of in open disagreement of your accounting firm, that's the problem.
the other hand, Toshiba is a big icon of corporate Japan. It's a bit like General Electric in America or Phillips in Holland. Putting them out into the kind of limbo of not being a listed company anymore would be a big decision for the Tokyo Stock Exchange to take.
>> Toshiba is looking to sell its profitable microchips division to balance the books. The stand out bidder, Foxconn, said to be lining up a $27 billion bid. A prospect that Tokyo could have something to say about.>> Having Foxconn which is a Taiwanese buyer, which is not really big in semiconductors.
There might be kind of more disquiet within the Japanese government about leakage of technology to a, effectively, a company with very big mainland Chinese operations.>> Microchips have long been the jewel in Toshiba's crown, but selling the division could be the company's last throw of the dice. After a crippling $6.3 billion write down on it's doomed US nuclear division, Westinghouse.