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The industrial conglomerate spooked investors
last week, saying it was extending an investigation into
inappropriate reporting of some infrastructure project costs and
construction work. It said this week the irregularities may mean
it has to mark down three years of profit by about 7 percent.
To buttress an internal probe, Toshiba on Friday appointed a
panel of four outsiders, headed by Koichi Ueda, a lawyer and
former head of the Tokyo High Public Prosecutors Office, as well
as another lawyer and two accountants.
"We will offer the third-party committee's investigation our
complete cooperation and make utmost efforts to regain trust in
the company," CEO Hisao Tanaka.
He apologized to shareholders for the problems, which have wiped
15 percent off the company's value in the past week, and said he
would take a 50 percent cut in his compensation until the
company is again able to pay a dividend.
Toshiba's second accounting investigation in less than two years
had provided unwelcome echoes for some in the Tokyo market of
previous probes that billowed into major corporate scandals. In
the highest profile case in recent years, camera and medical
equipment maker Olympus Corp in 2011 admitted to a 13-year
cover-up that hid $1.7 billion in losses.
The company said the new panel -- which will look at the parent
company and its 593 consolidated subsidiaries -- will broaden
the business areas and accounting issues being investigated by
the internal panel. But Toshiba said it does not yet know the
scope or time frame for the third-party investigation.
Toshiba, which has twice delayed reporting its earnings for the
year ended in March because of the irregularities, said it will
release them as promptly as possible after the new probe is
complete.
But it said it will "disclose any material information, if
found" by either probe as soon as possible.
The company's 50 billion yen initial estimate of overstated
operating profits for the three business years through March
2014 involved nine cases, Toshiba said on Friday.
(This story corrects the scale of the CEO's pay cut)
(Writing by William Mallard; Editing by Muralikumar Anantharaman
and Keith Weir)
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