Toshiba to seek extension for annual filing deadline: sources

[May 26, 2015]  TOKYO (Reuters) - Japan's Toshiba Corp is likely to seek an extension for its annual securities filing deadline amid a probe of past accounting irregularities, seeking to avoid being placed under supervision by the Tokyo bourse, sources said on Tuesday.

The industrial conglomerate has set up a third-party committee to conduct an independent inquiry into book-keeping errors that led to profits being overstated by at least $415 million in recent years.

Sources, including a regulator and senior company official, said the inquiry was likely to take more than a month, meaning Toshiba would be unable to file its annual report, the equivalent of a Form 10-K, before the end of June as required.

A delayed filing would mean its annual general meeting for shareholders, normally held in late June, could also be pushed back although it could hold a ceremonial meeting without discussing earnings.

"We do not yet have visibility into whether we can finalize earnings and file the annual report by end-June," said the company official, who requested anonymity because no decision had yet been made.
 

The government is likely to grant an extension, sources said. The company has already announced it was delaying its fourth-quarter earnings announcement and suspending a year-end dividend payment.

If Toshiba fails to secure an extension, missing the end-June filing deadline would automatically place the shares under supervision.

Even if the government grants an extension, however, investors said they feared Toshiba shares could still temporarily end up under supervision if the third-party investigation leads to a massive restatement.

So far, the company has said it was likely to mark down operating profit by at least 50 billion yen ($415 million) for the three years through March 2014, an amount investors have previously said was not a big deal.

Few fund managers have specific rules banning them from holding shares under supervision, but many surveyed by Reuters on Tuesday said they would be cautious about adding any shares in such a situation their portfolios.

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

The probe has provided an unwelcome reminder of previous investigations that turned 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.

(Reporting by Reiji Murai and Takahiko Wada; Writing by Ritsuko Ando, editing by David Evans)

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