Toshiba expands commitment line, shareholders approve new board
By Makiko Yamazaki
CHIBA, Japan (Reuters) - Toshiba Corp (6502.T: Quote) has secured a fresh, two-year commitment line from its main banks worth 400 billion yen ($3.3 billion), almost doubling the amount available and giving it a wider safety net as it seeks to recover from an accounting scandal.
The Japanese laptops-to-nuclear power conglomerate also confirmed a new, outsider-heavy board at an extraordinary shareholders session on Wednesday.
Toshiba is looking for a fresh start after revelations this year that it overstated earnings by $1.3 billion going back to fiscal 2008/09, prompting the chief executive and several other board members to resign.
Its shares have plunged around 40 percent since the accounting problems were first disclosed in early April, while slumping PC and television sales pushed the company to a first quarter operating loss. The Tokyo Stock Exchange has also placed the stock on a watchlist.
Toshiba said the expanded commitment line would help it in case of an unexpected downturn in the market.
New Chief Executive Masashi Muromachi has promised to reform a corporate culture of promoting unrealistic profit goals, and to restructure lower-margin businesses.
"Toshiba is determined to do all it can under the new management to regain public trust," Muromachi told shareholders, a few of whom shouted in anger, blaming management for the debacle.
Ahead of the meeting, activist U.S. proxy advisory firm International Shareholder Services recommended against voting for the reappointment of Muromachi and two other directors who were at Toshiba during the accounting irregularities, saying they were unqualified to spearhead change. Continued...