The move has put immense pressure on the Tokyo Stock Exchange. With the U.S. and Japan huddling together to block a common foe, China, it is to be seen how Foxconn’s offer, which is $10 billion more than Toshiba’s internal estimate, is reviewed. The Tokyo Stock Exchange will also have to consider how it will treat Toshiba’s unusual filing.
In what is a milestone for Japan-based Toshiba Corp, the electronic giant has filed its twice-delayed business results today without its accounts being endorsed by its auditor, thereby increasing the possibility of the conglomerate being delisted.
Toshiba’s filing carried a disclaimer from PricewaterhouseCoopers (PwC) Aarata LLC that it was unable to form an opinion of the results.
This unprecedented development will put the Tokyo Stock Exchange in focus as it will have to weigh the pros and cons of delisting Toshiba.
If the Tokyo Stock Exchange fails to act against Toshiba it would bring its credibility into question for maintaining standards for investors. On the other hand delisting the company would create a firestorm which could potentially engulf it and significantly boost its financing costs and further expose it to more lawsuits from angry shareholders.
There are no rules which state how long can the Tokyo Stock Exchange tale to make up its mind and come to a conclusion.
On a side note, Taiwan’s Foxconn has offered up to $27 billion (3 trillion yen) for Toshiba’s chip business. The amount is almost $10 billion higher than Toshiba’s own estimate, reported the Wall Street Journal (WSJ), citing people familiar with the matter at hand.
This has put additional pressure on Japanese regulators as they had earlier vowed to block a sale to investors whom it considered a risk to its national security.
Foxconn is viewed as a risky investor because of its close ties to China.