Toshiba scandal continues as more accounting errors found

Toshiba Corp again delayed announcing its annual financial results on Monday, as new accounting errors prevented the company from drawing a line under Japan's worst corporate scandal in four years. Toshiba, which was scheduled to post its earnings for the business year ended in March, said the newly discovered problems included incorrect impairment charges on fixed assets at several subsidiaries and improperly timed booking of loss provisions at a US subsidiary.
"We deeply apologise for the situation we are in yet again, and for the inconvenience and concern we have caused to our stakeholders including shareholders and investors," Chief Executive Masashi Muromachi said before making a deep bow of contrition to a packed, late-night news conference. The laptops-to-nuclear conglomerate had already delayed announcing its results by around three months due to an independent investigation over its past accounting practices.
That probe found Toshiba had overstated past results by around $1.2 billion over several years, prompting its then-CEO and several other executives to step down last month. It is Japan's biggest accounting scandal since 2011 when Olympus Corp was found to be involved in a $1.7 billion scheme to conceal two decades of investment losses. Toshiba said government regulators accepted its request for extension and that it plans to submit the results by September 7. Muromachi declined to say how much the newfound errors were worth but said they were "not huge".
Toshiba found some 10 new cases of accounting errors stretching back to around 2010, although these will not drastically affect Toshiba's forecast for an operating profit of 170 billion yen ($1.4 billion) for last fiscal year, Muromachi said. He said the US unit named in the new disclosure was not Toshiba's Westinghouse nuclear business. Investors have speculated the company might need to reassess the value of that business due to a downturn in nuclear energy demand.
The CEO said Toshiba should be able to meet the new deadline for closing its books but that if not, "I would have to consider taking responsibility, including resignation, if needed." Earlier this month, Toshiba said it would take 127 billion yen ($1.05 billion) in impairment charges for the past financial year to reflect writedowns in its nuclear business as well as semiconductor and appliance units. Its estimated 170 billion yen operating profit was below the 330 billion yen forecast it cancelled in May when it widened its accounting probe.