Toshiba Delays Earnings Report on Further Accounting Probe

31 Aug 2015 | Author: | No comments yet »

Toshiba Probing 10 New Accounting Issues Including at U.S. Unit.

Toshiba Corp. uncovered 10 new cases of accounting problems, including at a U.S. unit, prompting it to miss a regulator’s deadline for submission of its fiscal 2014 earnings release.“Rather than focusing on nuclear energy, other power segments, semi-conductors, it’s also looking into expanding in the health business and other business segments. The Japanese industrial group obtained permission from the regional securities regulator to postpone submission of the report due today until September 7, it said in a statement Monday. President Masashi Muromachi, who took charge after three of his predecessors left following a July third-party report on accounting practices at the company, said he may quit if the new deadline was missed.

Toshiba is in the process of restructuring its business, with the main focus on home electronics, such as refrigerators and washing machines, and its once very important television business. “Now, division head workers can make their voices be heard and outside board members have been increased drastically, so there is probably more checks on the top management’s decision making,” he said. Top management apologised by bowing, as is customary in Japan, and a string of top officials, including the president, and former presidents stepped down immediately.

Toshiba said Monday it discovered irregularities in percent-of-completion accounting related to a U.S. hydro-power unit’s construction project. “One week delay is not such a big deal, but that’s another week of uncertainty,” said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo. “They need to report as soon as possible.” Toshiba earlier this month had said it expected a net loss for the past year without providing a specific number as costs related to the scandal wiped out profit from Toshiba’s businesses, which span nuclear reactors, computer memory chips and laptop computers. The company has revamped its board, apologized to investors and appointed a special committee to try to win back trust and prevent further irregularities at the 140-year-old pillar of Japan Inc. The company had scrapped its earnings forecasts in May and announced an investigation of accounting irregularities that was subsequently expanded to cover the entire company.

Toshiba’s third-party report released on July 21 detailed practices that led to overstatement of profits, linking them to former presidents Hisao Tanaka, Norio Sasaki and Atsutoshi Nishida. No charges have been filed against Toshiba or its executives. “The company has completely lost investor trust, since no one had expected things to be this bad,” Yasuaki Kogure, chief investment officer at SBI Asset Management, said prior to the announcement. “We still don’t know whether the new management will change the company and how, and what it will consider as an achievable profit margin.” Has a comment offended you? Verified email addresses: All users on Independent Media news sites are now required to have a verified email address before being allowed to comment on articles.

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