Regulators to seek penalty on Toshiba for false accounting: Nikkei

Toshiba is believed to have overstated its operating profits by almost ¥170 billion over the five years through the business year ending in March 2014, sources said.

May 29 – Toshiba says accounting probe to end mid-July, gained approval to release annual report by August-end, first-quarter results by September 14 – one month later than usual bourse deadline.

The panel has found that Toshiba overstated its profits in its personal computer business, and estimated infrastructure construction expenses at lower than the actual initial cost.

“The Company expresses honest apologies to its shareholders, investor and all other stakeholders for any concern or inconvenience caused by the investigation into the Company’s accounting practices”, it said in a statement.

Improper accounting included overstatements and booking profits early or pushing back the recording of losses or charges, and such steps often led to even higher targets being set for divisions in the following period.

It has recently come to light that a number of top executives in Toshiba Corporation are reportedly involved in the accounting scandal that is now affecting the company, according to Reuters.

The report said Tanaka and Sasaki had set operating profit targets that the heads of divisions were required to meet, applying pressure by hinting at withdrawing from areas that underperformed.

The watchdog is expected to launch a separate investigation into the matter after a third-party committee hired to probe into the company’s past book-keeping practices, releases its report on 20 July. 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.

The Olympus scandal was described by the Wall Street Journal as “one of the biggest and longest-running loss-hiding arrangements in Japanese corporate history” and prompted a 37% fall in Olympus’ market value.

The company expects to pay up to Dollars 3 billion in charges relation to six years of improper accounting, the report continues.

The committee is to hold a news conference at 7 p.m. (1000 GMT) on Tuesday, according to the filing. However, Toshiba said that “the Company has not made any such announcement”.