TOKYO — Nobuaki Kurumatani, the outsider tapped to lead scandal-tarnished Japanese electronics company Toshiba Corp., is promising a turnaround in five years by reshaping its operations and boosting profitability.<\/p>\n
Kurumatani, the first outsider to be appointed chief executive at Toshiba in more than half a century, acknowledged the system of governance and risk management had been weak. He stressed he brought to the company his experience in the financial sector, where compliance controls were tougher.<\/p>\n
Toshiba has been embroiled in an accounting scandal involving massive doctoring of books.<\/p>\n
“I feel that the organization is determined to change,” Kurumatani told reporters Tuesday at Toshiba’s Tokyo headquarters.<\/p>\n
Toshiba has also racked up heavy losses in its nuclear business and is selling its lucrative computer-chip business to avoid going belly-up.<\/p>\n
At the centre of the losses is the acquisition of CB&I Stone & Webster by its U.S. nuclear unit Westinghouse, which filed for bankruptcy protection last year.<\/p>\n
Kurumatani said the company will withdraw from all overseas nuclear operations, and the future of the energy business is moving toward renewables.<\/p>\n
Costs of building nuclear reactors have surged due to beefed-up safety measures after a March 2011 accident at a plant in Fukushima in northeastern Japan sent three reactors into meltdowns.<\/p>\n
“Toshiba has many dedicated employees and talented engineers,” Kurumutani said. “Things go well when things are good. But once things start going wrong, then it keeps going wrong.”<\/p>\n
Toshiba’s chairman stepped down last year, but veteran Satoshi Tsunakwa has stayed on as president and chief operating officer and will be working with Kurumatani toward a turnaround.<\/p>\n
Kurumatani’s rise is an effort by Toshiba to put on a fresh face to a long-pristine brand that has plunged from grace not only over the Westinghouse fiasco but also because of spiraling accounting scandals that raised serious questions about its ethical practices.<\/p>\n
Efforts to reform corporate governance turned up more embarrassing wrongdoing, which dated back years.<\/p>\n
A graduate of the prestigious University of Tokyo, Kurumatani most recently served as president of CVC Asia Pacific Japan, an investment fund.<\/p>\n
Before that, he was deputy president and a director at Sumitomo Mitsui Financial Group, one of Japan’s biggest banking institutions and a major Toshiba lender.<\/p>\n
Unlike previous Toshiba executives with backgrounds in engineering, Kurumatani built his career in corporate planning, public relations and auditing.<\/p>\n
Toshiba has been gradually selling off pieces of its operations, such as its medical equipment and household appliance businesses.<\/p>\n
But the key sale is its prized flash memory chip business to a consortium led by Bain Capital Private Equity. That sale was initially set to be completed in March but is ongoing, awaiting regulatory approval in China, according to Kurumatani.<\/p>\n
Toshiba has reached a settlement with American computer data storage giant Western Digital, its joint venture partner, which had initially fought the sale.<\/p>\n
Toshiba still has a sprawling infrastructure business, such as railways, power systems and factory automation. It’s still responsible for running and decommissioning dozens of nuclear reactors in Japan, including those at the Fukushima plant.<\/p>\n
Toshiba is forecasting a profit for the fiscal year that ended in March, a reversal from the red ink it had expected earlier. It racked up a loss for the previous fiscal year.<\/p>\n
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Follow Yuri Kageyama on Twitter at https:\/\/twitter.com\/yurikageyama<\/a><\/p>\n