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Toshiba draws criticism from shareholders amid financial crisis

TOKYO -- Embattled Japanese conglomerate Toshiba faced scathing criticism from shareholders at its annual meeting on Wednesday as it weathers its worst-ever financial crisis.

"Toshiba needs visible reforms," one shareholder said, according to the Nikkei business daily. "Otherwise, shareholders, employees and society will not accept the company's efforts."

Investors worry the company is flailing as its debts mount, which led to the former blue chip company's shares being demoted to the second tier of the Tokyo Stock Exchange last week.

Toshiba president Satoshi Tsunakawa said he was sorry for the state of affairs on Wednesday.

"I apologize for repeatedly causing so much inconvenience and worries," Toshiba president Satoshi Tsunakawa said at the meeting in Chiba, 40 kilometers southeast of Tokyo.

Japanese regulators on Friday approved the extension of a deadline for submitting Toshiba's annual financial results to Aug. 10, as the company has yet to win approval for the report from its auditor.

On the same day, the Tokyo exchange announced Toshiba's demotion from top-tier listing as the company reported its liabilities had exceeded its assets for the previous financial year ended in March.

The 142-year-old Japanese company has faced its worst-ever financial crisis since its U.S. nuclear power unit, Westinghouse Electric, filed for bankruptcy protection in March.

Toshiba is hoping to sell its lucrative computer memory-chip business to survive.

Last week, the company picked a consortium of state-backed Innovation Network Corp of Japan, the state-owned Development Bank of Japan and U.S. fund Bain Capital as its preferred bidder.

The group's bid was considered to have exceeded Toshiba's 2-trillion-yen (US$18 billion) valuation of the memory-chip unit, the Nikkei business daily reported.

However, Toshiba missed a deadline for the deal with the consortium, though the company said last week it would reach the agreement by Wednesday's meeting.

"It is taking time to reach a consensus because the consortium comprises multiple parties, and closure was not achieved by Toshiba's primary target date," the company said in a statement prior to the shareholders' meeting.

"We are aiming to seal the deal as soon as possible, and we hope to close it with in the current financial year" through March 2018, Tsunakawa said at the meeting.

Toshiba's chip-producing partner Western Digital has opposed the move. The U.S. company has resubmitted a bid with U.S. investment fund Kohlberg Kravis Roberts (KKR) for Toshiba's chip unit, it said on Monday.

"Western Digital resubmitted a bid with KKR where Western Digital will provide debt financing to facilitate a sale by Toshiba Corporation of its interests in the NAND Flash Memory joint venture," the company said in a statement.

On Wednesday, Toshiba and Toshiba Memory have filed a lawsuit against Western Digital at the Tokyo District Court for blocking the sale of its computer memory-chip unit.

The U.S. company "has continually interfered with the bid process related to the sale" of the chip unit, Toshiba said in a statement.

Toshiba said it was seeking an injunction against acts of unfair competition and payment of 120 billion yen, among other things.

Earlier this month, Western Digital also asked a U.S. court to stop Toshiba from selling its chip business.

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