However, the company said in a statement that it is yet to finalise the impact of the accounting scandal on its financial statements. That would be more than three times Toshiba’s initial estimate.
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After a third-party panel investigating the company’s accounting irregularities presents a report to the company on Monday, the SESC will consider how much Toshiba should be fined for violating the Financial Instruments and Exchange Law, according to the sources.
The affair comes two years after a trio of former Olympus executives were handed suspended jail terms after being accused of engineering a $1.7 billion accounting fraud at the camera and medical equipment maker. The expected charges are said to involve six years of exaggerated profits and write-downs, the report said.
July 20 – Independent panel concludes Toshiba overstated its operating profit by 151.8 billion yen over several years. Tanaka and former president and current vice chairman Norio Sasaki are among those behind the profit-padding, local media said, as they allegedly put excessive pressure on subordinates to achieve profit targets.
On Wednesday, Reuters reported that Toshiba hired a third-party committee to look into past book-keeping practices that sources think resulted in overstatement of profits by over 170 billion yen (about 1.4 billion dollars). Prime Minister Shinzo Abe is backing the corporate reform campaign, as he cracks down on misbehaving corporations in a bid to attract desperately needed foreign investment. but we are yet to see any ground breaking revelations.
More specifically, Toshiba said that during the investigation, “instances have been identified in some infrastructure-related projects in which the percentage-of-completion method of accounting was used, wherein the total amount of the contract cost was underestimated and contract losses (including provisions for contract loss) were not recorded in a timely manner”. Says to release entire report, hold news conference at 5 p.m. (0800 GMT) on July 21.
The scandal also shakes a stalwart of Japanese industry, which has regularly supplied leaders to Japan’s biggest business lobby.
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“Toshiba had a corporate culture in which management decisions could not be challenged”, it added, ahead of the release of the full report on Tuesday.
