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Toshiba to Book Up to $3 Billion Loss Over Accounting Scandal

The charges include six years of overstated profits uncovered by an independent panel.

Chris McGrath / Getty

Toshiba expects to book charges of 300 billion to 400 billion yen ($2.4-3.2 billion) related to improper accounting, people briefed on the matter said on Wednesday, as Japan’s biggest accounting scandal in years expands.

The charges include six years of overstated profits uncovered by an independent panel probing the electronics conglomerate’s accounting irregularities, as well as various writedowns, the people told Reuters.

It was not clear how much of that amount would be booked in the business year that ended in March of this year. Toshiba has been unable to close its books for the latest business year due to the scandal, and suspended its year-end dividend payout.

A Toshiba spokesman declined to comment.

The company will file its earnings in late August, the sources said.

Toshiba’s stock price has sunk 27 percent since early April on Japan’s biggest accounting scandal since camera maker Olympus admitted in 2011 that it used M&A deals to conceal investment losses.

The third-party panel, appointed by Toshiba after the accounting irregularities emerged, has found 170 billion yen in overstated profits, the sources said. That is far above the 54.8 billion yen the company initially disclosed in June.

In addition to a charge on the overstated profits, the sources said, Toshiba is expected to post writedowns on the value of chip-making facilities and on deferred tax assets, or credits that can be used to reduce future tax bills.

Toshiba, which has 1.2 trillion yen in capital, is considering the sale of unused facilities, cross-shareholdings and non-core businesses to shore up its capital, the sources said.

(Reporting by Taro Fuse; additional reporting by Reiji Murai; writing by Taiga Uranaka; editing by William Mallard and Edmund Klamann)

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