News | Cardiac Imaging | December 28, 2015| Dave Fornell

Toshiba May Sell its Healthcare Division as Part of its Financial Reforms

Scandal from intentionally posting false financial reports results in job cuts and putting its healthcare division up for sale

December 28, 2015 — Toshiba announced Dec. 21 it is considering selling off its healthcare division as part of its restructuring plans in the aftermath of its falsified financial reporting scandal from earlier this year. 

In February 2015, Toshiba revealed it had manipulated its financial figures for the past seven years to improve the image of its bottom line following the global economic downturn starting in 2008. In September Toshiba submitted amended financial reports from 2015 back to April 2009 to correct the misinformation on the previous reports. 

The Japanese Securities and Exchange Surveillance Commission imposed a penalty of 7.3 billion Yen (more than $60 million in U.S. dollars) due to the false financial statements. Toshiba also created an independent auditing group to investigate the financials, leading to the resignation of five members of the company’s Board of Directors.

The revelation of the false reporting statements has shown Toshiba to be in the red with some of its businesses. Its recent financial reports showed stagnation in its home appliance business, part of its lifestyles product and services divisions that include TVs and personal computers.  The division posted big revenue declines in 2015. 

During the Dec. 21 press conference, the company explained how it would revitalize itself in 2016. Beyond implementing financial reforms in its reporting, this includes cutting 10,600 jobs, mostly from its lifestyles and semiconductor divisions and from its corporate staff.  The company also prioritized selling shares of its healthcare segment to outside investors. The company said while the business has been profitable, it needs additional research and development, and management resources to continue its expansion.  The company said much of the R&D in this segment has been in creating next generation computed tomography (CT) systems

It is refocusing efforts in the energy and information storage divisions and is inviting outside majority shareholders in the healthcare business to secure management resources necessary for further growth. 

In its December financial report, Toshiba said its healthcare segment net sales grew to a total of $3.4 billion. The division's products include imaging systems for CT, MRI, PET-CT, angiography, digital X-ray and ultrasound.

 

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