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http://www.bloomberg.com/news/articles/2015-08-31/toshiba-delays-earnings-report-on-additional-accounting-probe
Toshiba Probing 10 New Accounting Issues Including at U.S. Unit
By Pavel Alpeyev & Takashi AmanoToshiba Corp. fell the most in more than three months in Tokyo trading after the industrial group discovered new accounting irregularities related to a U.S. unit’s construction project.
The problems caused the company to delay the release of its fiscal 2014 earnings until Sept. 7, it said in Tokyo Monday after the market closed. The shares fell 5.3 percent, the most since May 11, to close at 363.5 yen on Tuesday.
President Masashi Muromachi, who took charge after three of his predecessors left following a July third-party report showing accounting irregularities at the company, said he may quit if the new deadline isn’t met. The Japanese industrial group obtained permission Monday from the securities regulator to postpone the report, its second delay of earnings that had initially been due earlier this year.
“Failure to complete its fiscal year to March 2015 securities filings would put the company at a greater risk of being delisted,” Takeo Miyamoto, an analyst at Mitsubishi UFJ Morgan Stanley, wrote in a report on Tuesday. “This point in particular leaves a negative impression, since the market had generally viewed delisting as extremely unlikely.”
The Tokyo Stock Exchange requires companies to disclose earnings quarterly in a timely manner, according to its website.
Toshiba doesn’t risk delisting if it meets the deadline set by the regulator for filing its earnings, said Shoki Oyabu, a spokesman for the Japan Exchange Group, which operates the Tokyo Stock Exchange. The company can delay for as many as eight business days, which gives Toshiba until Sept. 17, he said.
Lost ValueThe company has lost about $4 billion in market value, almost a quarter of the total, since announcing May 8 it had uncovered accounting irregularities.
Probes of Toshiba’s financial reports have been expanded repeatedly. The probes led to the resignations of the company’s president and his two predecessors and caused at least $1.2 billion in writedowns. Toshiba said Monday it discovered irregularities in percent-of-completion accounting related to a U.S. hydro-power unit’s construction project.
The company has said it expected a net loss for the past fiscal year, without providing a specific number. Costs related to the scandal wiped out profit from Toshiba’s businesses, which span nuclear reactors, computer memory chips and laptop computers, it said.
Toshiba 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.
Toshiba on Aug. 18 said it expected operating income of 170 billion yen ($1.4 billion) for the year ended March 2015 and pretax profit of 140 billion yen. It didn’t give a figure for net income at that time.
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.
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