Toshiba Accounting Charges Could Reach $3 Billion
Toshiba is facing a stiff charge off that could range between 300-400 billion yen, or $2.4 – $3.2 billion, from improper accounting practices resulting in a massive overstatement of the company’s profits from the past six years.
The iconic Japanese vendor may have overstated its profits over a six-year period by some 170 billion yen, or more than triple its 50 billion yen initial estimates, according to a Reuters report citing sources. The expected charges are said to involve six years of exaggerated profits and write-downs, the report said. Toshiba is said not to have determined whether to take the charge in its last fiscal year.
At this point, Toshiba reportedly has not made a full calculation of the overstated profits. The vendor is said to have brought in a special group to investigate its bookkeeping practices and to determine the exact amount.
Reuters sources said the financial probe could push Hisao Tanaka, Toshiba chief executive, to resign his post and force other directors to exit the company as well. Right now it’s not clear who might replace Tanaka or other directors, should he either elect to resign or be forced out.
Some 25 percent of Toshiba’s 16-member board is comprised of independent directors, which has prompted some observers to question their ability to assess the company’s strategy or to closely watch its accounting procedures, the report said.
Others have speculated that Toshiba overstated costs and revenue associated with new businesses such as smart meters and electronic toll booths in the wake of the country’s 2011 Fukushima nuclear disaster as the vendor sought to recoup lost sales.
And, there’s some buzz that investigators are questioning if some of Toshiba’s top brass were aware of the improper accounting and looked the other way.
Reuters reported that owing to the investigation Toshiba has elected to suspend paying its year-end dividend.
The investigating committee is expected to make public its findings next week, the report said. Speculation is they will advise Toshiba to axe 50 percent of its board, including Vice Chairman Norio Sasaki and Tanaka, at the next shareholders’ meeting in September, Reuters sources said.