Trust banks plan to sue
Toshiba over 2015 accounting scandal
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[January 30, 2017]
By Taiga Uranaka and Makiko Yamazaki
TOKYO
(Reuters) - Japanese trust banks are preparing to sue Toshiba Corp over
its 2015 accounting scandal, a fresh headache for the conglomerate as it
scrambles to offset a separate imminent multi-billion dollar writedown.
The news follows an announcement by the struggling conglomerate on
Friday that it will sell a minority stake in its memory chip business to
raise funds and that its overseas nuclear division - the cause of its
current woes - was now under review.
Chairman Shigenori Shiga is ready to step down to take responsibility
for the upcoming charge - estimated at around $6 billion, local media
have also reported.
The announcements on Friday failed to clear up much of the uncertainty
surrounding Toshiba and its shares lost 3.7 percent on Monday.
"No explanations were offered as to the ultimate scale of the impairment
losses to be recorded in the business or how the company intends to
control risk going forward," Takeshi Tanaka, an analyst at Mizuho
Securities, wrote in a note to clients.

Mitsubishi UFJ Trust and Banking Corp said on Monday it is preparing to
seek 1 billion yen ($8.7 million) in damages on behalf of its client
pension funds after Toshiba's shares slid in the wake of the accounting
scandal two years ago. The bank is a unit of Mitsubishi UFJ Financial
Group.
Two other trust banks, Sumitomo Mitsui Trust Bank Ltd and Mizuho Trust &
Banking Co are also preparing similar suits, said sources with direct
knowledge of the matter, declining to be identified as they were not
authorized to speak to the media.
Representatives for the two banks declined to comment.
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A logo of Toshiba Corp is seen on a printed circuit board in this
photo illustration taken in Tokyo July 31, 2012. REUTERS/Yuriko
Nakao/File Phot

In
October, Toshiba said 45 overseas institutional investors filed a suit seeking
16.7 billion yen in damages since it first admitted to reporting inflated
profits going back to 2008. That is in addition to suits from 15 groups and
individuals in Japan that total 15.3 billion yen.
The Tokyo Stock Exchange has placed Toshiba on its watch list since September
2015, following the revelation of the accounting scandal, and the exchange
demands improvement on corporate governance and compliance measures.
The watch list status has made it effectively impossible for Toshiba to resort
to new share issues to raise funds. The company is required to submit a report
on its internal control measures to the exchange in March.
"Why and how the company has had to book the writedown is a matter of grave
concern," Akira Kiyota, the chief executive of Japan Exchange Group, which owns
the Tokyo Stock Exchange, told a news conference.
(Reporting by Makiko Yamazaki and Taiga Uranaka; Additional reporting by
Takahiko Wada; Editing by Edwina Gibbs and Clarence Fernandez)
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