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Toshiba says accounting probe to take until mid-July

Published 29/05/2015, 13:41
© Reuters. Logo of Toshiba Corp is seen at the company's Hydrogen Energy R&D Center during its opening ceremony in Tokyo

By Ritsuko Ando

TOKYO (Reuters) - Toshiba Corp will file its annual report up to two months later than usual as an ongoing independent investigation into accounting irregularities will likely last until mid-July, the Japanese conglomerate said on Friday.

Toshiba has not been able to close its books for the year that ended in March because of the investigation into its book-keeping, which it says likely led to profits being overstated by at least 50 billion yen ($415 million) in recent years.

It has also skipped its year-end dividend.

The company's results for the full fiscal year would normally have been reported by mid-May, and the standard deadline for filing annual reports, the equivalent of 10-K reports, is the end of June.

Toshiba said the government had approved its request to submit its annual report by end-August and announce its fiscal first-quarter results by September 14, a month later than the standard deadline for April-June quarterly earnings reports.

The approval means the company's shares will not automatically be placed under supervision for potential delisting due to the delayed filing, a warning that would likely scare off conservative investors even if temporary.

"We accept the gravity of this extraordinary situation, and deeply apologise for the inconvenience we caused to many, including shareholders," Chief Executive Hisao Tanaka said, before bowing deeply in front of reporters and analysts late on Friday.

"It's not my place to comment on possible supervision or delisting, but I will do my utmost to avoid such developments," he said.

Previous accounting investigations in Japan have included camera and medical equipment maker Olympus Corp's 13-year cover-up of $1.7 billion in losses.

Shares of Toshiba, whose businesses range from laptop computers to nuclear power plants, have fallen about 20 percent since it disclosed an initial internal probe in early April.

The company said it plans to hold an annual general meeting on June 25 for shareholders to vote on appointing its board of directors. Tanaka said the company also planned to hold an extraordinary meeting of shareholders after the third-party investigation is over.

Sources have said Toshiba executives were considering a way to compensate investors for the missed dividend with a special dividend payment after the investigation is over provided its findings show the company's finances are strong enough.

© Reuters. Logo of Toshiba Corp is seen at the company's Hydrogen Energy R&D Center during its opening ceremony in Tokyo

Tanaka said the company would consider the issue of dividend payments after the investigation is completed.

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