Japan’s Toshiba is going to end 74 years of stock market history

  • By Mariko Oei
  • business reporter

image Caption,

Toshiba is one of the oldest and largest companies in Japan.

Toshiba, one of Japan’s oldest and biggest companies, is set to end its 74-year stock market history as a group of investors bought a majority stake.

The company has announced that a consortium led by private equity firm Japan Industrial Partners (JIP) has purchased 78.65% of its shares.

Owning more than two-thirds of the firm allows the group to complete a $14 billion (£11.4 billion) deal to take it private.

The company’s roots go back to 1875 as a manufacturer of watches and mechanical dolls.

Under the deal, its shares can be delisted from the stock market by the end of this year.

“The company will now take a major step toward a new future with a new shareholder,” Taro Shimada, Toshiba’s president and chief executive, said in a statement.

Trading of Toshiba shares began in May 1949 when the Tokyo Stock Exchange reopened after Japan recovered from the devastation of World War II (WW2).

Its divisions range from home electronics to nuclear power stations, and for decades after World War II it was a symbol of the country’s economic recovery and its technology industry.

In 1985, Toshiba launched “the world’s first mass-market laptop computer”.

image Source, getty images

image Caption,

For decades after World War II, Toshiba was a symbol of Japan’s economic recovery and its high-tech industry.

However, the Tokyo-based company has faced several major setbacks in recent years.

“Toshiba’s disaster is the result of inadequate corporate governance at the top,” Gerhard Fasol, chief executive of business advisory firm Eurotechnology Japan, told the BBC.

In 2015, it admitted under-reporting its profits by more than $1 billion over six years and paid a fine of 7.37 billion yen ($47 million; £38 million), the largest in the country’s history at the time.

It sold its memory chip business, seen as a crown-jewel in the company’s portfolio, in 2018 to avoid bankruptcy.

“Toshiba is a national treasure in the eyes of many Japanese people, and especially the government, which is part of the problem,” Mr. Fasol said.

Before the new breakup plan was implemented, the company’s board said it was considering JIP’s proposal to take the company private.

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