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Toshiba confirms SEC investigation as accounting woes spread to US Toshiba confirms SEC investigation as accounting woes spread to US
(about 7 hours later)
Toshiba has announced its American businesses are cooperating with US authorities over alleged accounting irregularities, a day after its shares tumbled on a report it was under investigation. Toshiba has announced its US businesses are cooperating with authorities over alleged accounting irregularities and is to cut a further 3,000 jobs.
Related: Toshiba boss quits over £780m accounting scandalRelated: Toshiba boss quits over £780m accounting scandal
The company has been roiled by a profit-padding scandal in which bosses for years systematically pushed their subordinates to cover up weak financial figures. The company has been shaken by a profit-padding scandal in which senior management for years systematically pushed subordinates to cover up weak financial figures.
Toshiba, a pillar of Japan’s industrial establishment, is expecting a huge loss of about 710 billion yen (US$6.4bn) for the year to March with sagging global demand also contributing to its financial woes. Toshiba, a pillar of Japan’s industrial establishment, is expecting a huge loss of about 710bn yen (US$6.4bn or £4.4bn) for the year to March, with declining global demand exacerbating financial woes.
“Several of our US subsidiaries have been requested to provide information by the US Department of Justice and [the] Securities and Exchange Commission, and they are cooperating with the request,” Toshiba said in a statement, referring to what it described as an “accounting problem” though it refrained from naming any of the companies. The group said in a statement: “Several of our US subsidiaries have been requested to provide information by the US Department of Justice and [the] Securities and Exchange Commission [SEC], and they are cooperating with the request.” It referred to what it called an “accounting problem”, although it refrained from naming any companies.
The statement came after Bloomberg News, quoting unnamed sources, reported on Thursday that the US Justice Department and the Securities and Exchange Commission were examining if any fraud occurred over a loss booked by Toshiba’s US nuclear business unit Westinghouse. The statement came after Bloomberg News reported on Thursday that the US justice department and the SEC were investigating if any fraud occurred over a loss booked by Toshiba’s US-based nuclear business division, Westinghouse.
The loss could be up to 200bn yen, the Asahi Shimbun daily said. The loss could be up to 200bn yen, the Asahi Shimbun daily newspaper reported.
On Thursday Toshiba’s stock fell nearly 8% in Tokyo following the probe report, but in early trading on Friday the shares were up more than 4%. Toshiba shares fell nearly 8% in Tokyo on Thursday following the reports, but rebounded on Friday, closing up 4.2% – the second biggest riser on the Nikkei, the Japanese stock market.
Toshiba said it would hold a news conference on Friday after market close to announce its mid-term business plan. Toshiba said at a press conference held after the market closed on Friday that it would slash a further 3,000 jobs, taking total job losses to 14,000.
In December Japan’s Securities and Exchange Surveillance Commission said Toshiba should be slapped with a record 7.37 billion yen fine over the profit-padding scheme that hammered its reputation. The company said it expected to return to the black in the year starting in April, when it is forecasting an operating profit of 120bn yen.
In the wake of the scandal Toshiba – a vast conglomerate that makes everything from rice cookers to nuclear plants – has cut thousands of jobs and moved to sell some businesses in a bid to revive itself. Toshiba also said it it was conducting a stress test on its Westinghouse division to assess whether it needs a writedown. It added that goodwill at Westinghouse was estimated to fall to 351.3bn yen by the end of March, from 385.2bn yen at the end of December.
Toshiba said on Thursday that it had sold its medical devices unit to camera and office equipment maker Canon for almost US$6bn. Nuclear power has become less popular since Toshiba’s acquisition in 2006, especially following the Fukushima disaster which prompted many countries to freeze nuclear energy expansion.
It also announced a basic agreement to sell a majority interest in its home appliance business to China’s Midea. A Toshiba spokeswoman said a price for the deal had yet to be announced. The 152bn yen (£780m) accounting scandal led to the departure of Toshiba’s boss Hisao Tanaka last summer. An independent panel of accountants and lawyers found that Toshiba overstated its operating profits over several years in accounting irregularities involving top management.
In December, Japan’s Securities and Exchange Surveillance Commission imposed a record 7.37bn yen fine on the company over the accounting scandal which has hammered its reputation.
In the wake of the scandal Toshiba – a vast conglomerate that makes everything from TVs, PCs and rice cookers to nuclear plants – has cut thousands of jobs and moved to sell some divisions to streamline the business.
Toshiba said on Thursday it had sold Canon, which makes everything from medical devices unit to camera and office equipment, for almost $6bn. It also announced a basic agreement to sell a majority interest in its home appliance business to China’s Midea.