Sources: Toshiba overstated profits more than $1.3 billion

Following CEO Tanaka’s decision to step down, Toshiba to face $2-3 billion in charges over accounting scandal

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

A third-party committee hired by Toshiba to investigate accounting irregularities found profits being overstated more than 1.3 billion, anonymous sources cited by Reuters said on Wednesday.

Toshiba expects to face more than 300 billion yen ($2.4 billion) in charges over the irregularities that caused its chief executive Hisao Tanaka to resign, sources say.

According to the sources, the committee uncovered overstated profits along with various write downs over the past six years.

Several media reports on Wednesday said that Toshiba CEO Tanaka is to step down along with half of the board leaving in September’s shareholders meeting.

The committee is expected to report its findings next week.

Toshiba reported accounting irregularities in early April, two months after a report requested by financial regulators was due.

While the manufacturing company hired a third-party panel to investigate these irregularities, it hasn’t closed its books for the past financial year or suspended its year-end dividend.

Investigators mainly appear to believe that Toshiba’s executives resorted to understating costs and overestimating revenues to hide the impact of the 2011 Fukushima disaster on its nuclear division, Reuters said, citing anonymous sources.

Toshiba’s shares fell 2.6 percent on Thursday morning, totalling a 29 percent loss since April.

TRTWorld and agencies