Toshiba$$s quarterly operating profit fell almost $90$ per cent, as turmoil at the

scandal$-$ridden Japanese industrial conglomerate deepened with the resignation of a

top executive over improper entertainment expenses. The disappointing results $$ far

below analysts$$ forecasts $$ come as Toshiba considers a $$15$bn buyout proposal from

a consortium led by a Japanese private equity firm, in what would be the country$$s

largest take$-$private deal.

Toshiba$$s chief operating officer Goro Yanase resigned after auditors found he

had repeatedly submitted entertainment expenses without reporting the names of

attendees, in violation of company rules. The alleged misconduct took place when he

was a board member of a subsidiary in $2019,$ before his nomination as chief operating

officer. The company posted an operating profit of $5\mathrm{.}3$bn $($$$40\mathrm{.}1$mn$)$ for the October$-$

December quarter, far less than a consensus estimate of $38$bn$,$ according to S&P

Global Market Intelligence.

Its hard$-$drive business was hit by a drastic weakening of demand as

manufacturers and businesses curbed spending in the face of a recession. The

conglomerate also recorded a $10\mathrm{.}2$bn impairment charge for its Toshiba TEC printing

business as the subsidiary$$s share price fell. Toshiba cut its full$-$year operating profit

forecast by a quarter and now expects to post one of $95$bn for the fiscal year through

to March. It is the second downward revision of its guidance since November.

The company blamed one$-$off factors for its poor performance, but the abrupt

resignation of the chief operating officer is another blow to its reputation. It has lurched

from accounting fraud to financial crisis and a protracted battle with activist investors.

The $147-$year$-$old enterprise last week received a final acquisition proposal from

Japan Industrial Partners, which has teamed up with financial services group Orix,

Chubu Electric, chipmaker Rohm and other Japanese companies. If the proposal is

approved by Toshiba$$s board and activist shareholders, it would conclude an eight$-$

year saga that has brought the industrial conglomerate to the brink of collapse.

$$With the aim of acting in the best interests of shareholders and other

stakeholders $...$ the company will conduct necessary negotiations,$$ said Toshiba chair

Akihiro Watanabe in a statement on Tuesday. $$We feel strongly that there is an urgent

need to transform the company,$$ he added. $$We believe it is important to reach a final

conclusion on the strategic alternatives of the company as soon as possible and to

start working towards a new stage.$$

$$I don$$t think there are no business opportunities for Toshiba, but $[$the latest

earnings results and the chief operating officer$$s departure$]$ shows it is in a difficult

situation,$$ said Masahiko Ishino, a senior analyst at advisory company Tokai Tokyo

Research Institute. $$It could be questionable that banks are financing the massive

buyout.$-$ how could Toshiba management use the balanced scorecard approach to address strategic issues from the situation depicted above?