Trusting Westinghouse at the New Plant Vogtle?

Toshiba stock price is down about 60% since the first of the year and Japan just entered a recession.

A big nuclear power plant project like this needs humongous financial forces behind them to complete the problem. These guys are all hobbled by credibility problems and are all financially weakened. The Southern Company is backing this big project and are in Cat 5 natural gas hurricane weakening their financial security though dropping grid electricity price problem.

Wiki: The AP1000 is a nuclear power plant designed and sold by Westinghouse Electric Company, now majority owned by Toshiba. The plant is a pressurized water reactor with improved use of passive nuclear safety.

Westinghouse being the reactor designer and now the construction contractor implies a conflict of interest and ethical problems over all safety issues. This project is heading towards a giant crash.

Reuters 11/18: Japan's securities watchdog is likely to recommend Toshiba Corp be fined about 7 billion yen ($57 million), a source familiar with the matter said on Wednesday, in what would be a record in the country for accounting-related violations. 

Knowing the South, they will blame it on government and pawn off all the bad debts to the tax payers.

Japan’s securities watchdog eyes record ¥7 billion fine for Toshiba

Kyodo  

Nov 18, 2015                         

The Securities and Exchange Surveillance Commission plans to recommend imposing a fine of some ¥7 billion on Toshiba Corp. for falsifying its financial reports, sources familiar with the matter said Wednesday.

The recommendation by the nation’s securities watchdog is expected to be made to the Financial Services Agency by the end of November, based on the financial instruments and exchange law, the sources added. 

Since improper accounting practices at its major divisions came to light earlier this year, Toshiba has made a spate of downward revisions to its past financial statements, totaling ¥224.8 billion on a pretax basis from April 2008 to December 2014.

The commission has judged that Toshiba falsified its financial statements and earnings summaries from fiscal 2010 to 2014, the sources said. 

Toshiba issued bonds valued at over ¥300 billion for that five-year period, which apparently led to the massive fine, according to the sources. 

The fine will top the previous record of ¥1.6 billion slapped on IHI Corp. in July 2008 for issuing falsified financial statements. 

Toshiba has set aside ¥8.4 billion for fiscal 2014 that ended this March to pay for potential penalties based on its own calculations. 

The systematic inflation of profits spanning nearly seven years has hurt public confidence in Toshiba — the manufacturer of products ranging from chips and personal computers to nuclear power plants — and raised the need for restructuring of its unprofitable businesses. 

Following the scandal, Toshiba revamped its management and increased the number of outside directors to improve governance. The company is seeking ¥300 million in damages from five former executives for their negligence. 

On Tuesday, Toshiba disclosed details about past write-downs totaling around ¥115.6 billion by its U.S. nuclear unit Westinghouse Electric Co. for fiscal 2012 and 2013.
It came after the Tokyo Stock Exchange took issue with Toshiba’s failure to disclose the write-downs worth ¥76.2 billion for fiscal 2012 due to the huge size of the loss.

Westinghouse to complete construction at Plant Vogtle, Georgia Power says

Westinghouse bought out nuclear construction business from orginal contractor CB&I

By Walter C. Jones Wed, Oct 28, 2015 @ 7:33 am

Westinghouse Electrical Co. will complete the contract, taking over for CB&I, the original contractor. 

Georgia Power is the largest owner and operator of the plant, along with Oglethorpe Power Corporation, Municipal Electric Authority of Georgia and Dalton Utilities. 

Westinghouse and CB&I announced separately that Westinghouse bought CB&I’s nuclear-construction business for $229 million, which includes a contract to build two reactors at Plant V.C. Summer in South Carolina and nuclear plants in China, as well as the Vogtle contract. 

Westinghouse, in turn, hired Fluor Corporation to manage most of the construction. All the reactors are using the AP1000 design and represent the first reactors build in the United States in more than 30 years.  

CB&I will continue to supply some modules for the reactors as a subcontractor, the company said. Not included in the transaction is CB&I’s contract for work at the MOX nuclear-fuel conversion at the Savannah River Site. 

Construction at Vogtle has been dogged by delays and budget overruns. 

The Vogtle owners and CB&I were suing each other in federal court over who was responsible for costly delays. Tuesday’s announcement said those suits had been settled, with Georgia Power making at $350 million payout. The other owners are also paying additional amounts. Oglethorpe, which owns 30 percent of the plant, is paying $230 million.
“This settlement is extremely positive for the Vogtle project, and now the contractors can focus 100 percent on project execution,” said Buzz Miller, executive vice president of nuclear development for Georgia Power. 

According to Georgia Power’s announcement, construction at Vogtle will continue with Unit 3 coming online in 2019 and Unit 4 in 2020. 

The Georgia Public Service Commission hasn’t determined if customers will have to pay for any of the budget overruns. It will also have to decide who pays for Georgia Power’s share of the legal settlement.

Toshiba Shares Dive as Westinghouse Disclosure Spooks Investors

Impairment charges of $1.3 billion is latest news to shake investor trust

The Toshiba logo seen through a roof panel at its headquarters in Tokyo. Shares fell sharply Friday after the latest in a series of unusual disclosures. Photo: Reuters

By Takashi Mochizuki

Takashi Mochizuki

The Wall Street Journal

Nov. 13, 2015 4:50 a.m. ET

TOKYO— Toshiba Corp. TOSYY -0.28 % shares fell sharply Friday after the Japanese electronics and industrial giant said its U.S. nuclear business, Westinghouse Electric Co., booked $1.3 billion in impairment charges, raising investor concerns about a new phase in a drawn-out accounting scandal.

It was the latest in a series of unusual financial disclosures that have shaken investor trust, even after Toshiba overhauled its board and senior management this summer to try to move on from the scandal.

Toshiba said at an earnings briefing last weekend that Westinghouse’s plant construction business stalled after the Fukushima nuclear disaster in Japan four years ago, but didn’t reveal the amount written down until late Thursday. The company confirmed the $1.3 billion impairment charges, which took place during the 2012 and 2013 fiscal years, after a report in Japanese magazine Nikkei Business.

“It’s a big amount,” said Naoki Fujiwara, fund manager at Shinkin Asset Management. “It would have been fairer had they disclosed that from the beginning.”

Toshiba shares closed at ¥295 on Friday, down 6% for the day and well below the ¥500 level in March, before the accounting problems came to light.

Toshiba said Friday that Westinghouse booked net losses in fiscal 2012 and 2013 as a result of the write-down, but it declined to provide figures, saying it is not the company’s policy to reveal detailed financial information on affiliates.

Tohiba said its evaluation of the nuclear business is consistent with U.S. accounting rules. It said Westinghouse took the charges because some of its product lines struggled, but added that Toshiba didn't need to write down the value of Westinghouse on the parent company’s books because the nuclear business is profitable and will remain so.

Helped by solid demand for nuclear fuel and maintenance work, Westinghouse turned a profit of $200 million to $300 million annually, on average, from 2007 through 2014, Toshiba says. Toshiba acquired a majority stake in Westinghouse for $5.4 billion in 2006, setting its nuclear unit as a core growth area. The company calculates the value of Westinghouse at ¥515.6 billion ($4.2 billion).

Toshiba shares closed at ¥295 on Friday, down 6% for the day and well below the ¥500 level in March, before the accounting problems came to light.

Toshiba is trading well below its book value, which is equal to assets minus liabilities. The company’s market capitalization stands at about Y1.25 trillion, compared with a book value of Y1.46 trillion, as of Sept. 30.

Analysts say the company’s drip feed of disclosures undermines the credibility of Prime Minister Shinzo Abe’s campaign to bolster the transparency of company finances and governance in a bid to attract more foreign investment.

“This is a typical example of Japanese companies, which often lack accountable management and get behind the curve when bad things happen,” said Akie Iriyama, an associate professor at Waseda Business School.

The Tokyo Stock Exchange has put Toshiba on its watch list.