Toshiba Shares Smashed After $1.2 Billion Dodgy Profits Scandal
Now the Japanese Company is set mark down past profits by a massive $1.2 billion due to what Toshiba management are describing as “accounting irregularities”.
The latest markdowns is almost double its earlier estimation with a large percentage of profits or lack of them attributed to the poor performance of the Companies PC Division.
In a case shaping up to be one of corporate Japan’s biggest debacles since a scandal at Olympus in 2011, a Toshiba-appointed independent panel has been investigating the infrastructure giant’s finances after Japan’s financial watchdog warned of possible accounting irregularities back in February.
The company said in May it would need to reduce its profit for the 2009 through 2013 fiscal years because of improper accounting.
Since the problem was discovered and following investigations by independent investigators, massive irregularities were discovered in Toshiba’s personal computer and semiconductor businesses
Initially Toshiba management tried to hide the scale of scandal.
The independent panel is expected to report its findings by mid-July. Chief executive Hisao Tanaka has hinted there will be a major management reshuffle at that time with the real possibility emerging that more Countries selling PC’s could be slashed or the PC Division dumped all together.
The Wall Street Journal said that as a result of the accounting problems, Toshiba hasn’t been able to report its earnings for the 12-month period ending March 31-an announcement originally scheduled for June. The company hopes to file the earnings by the end of August.
Worries over the earnings restatement and the company’s corporate governance culture have weighed on Toshiba’s shares which have plunged on the Tokyo stock market.
Analysts say, however, they are not worried about the possibility of a cash shortage.
“This is one of the largest crises in our company’s history,” said Mr. Tanaka, at an annual meeting of shareholders last month. Some shareholders demanded the resignation of all executives when their terms expire in September.