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Toshiba asks for second third-quarter extension, expands Westinghouse probe

Toshiba asks for second third-quarter extension, expands Westinghouse probe
March 14, 2017
TOKYO - Japan's Toshiba Corp said it has asked regulators to extend its Tuesday deadline for official third-quarter earnings for a month, as its expands a probe into problems at its US nuclear unit Westinghouse. Requesting its second extension, the company said its auditing committee had confirmed that certain Westinghouse senior managers had exerted 'inappropriate pressure' in the accounting for an acquisition of a US nuclear power plant construction company in its third-quarter earnings. It now needs to check whether any pressure was exerted in preceding quarters as it would also be filing nine-month results and has requested an extension until April 11, it said in a statement to the Tokyo Stock Exchange. Toshiba will also expand the scope of the probe to see if 'other inappropriate pressures' were also exerted, it said without elaborating on what they could be. The extension request, which comes after the beleaguered TVs-to-construction conglomerate first postponed the release of audited earnings a month ago, sent Toshiba's shares sliding 8 percent in morning trade. The request only underscores deepening woes for the deeply troubled TVs-to-construction conglomerate. Plagued by cost overruns at US projects in Georgia and South Carolina, Westinghouse has hired bankruptcy lawyers as an exploratory move, sources have said - an option that could help Toshiba limit future losses. Those projects are being handled by the ill-fated US nuclear power plant construction company that Westinghouse bought from Chicago Bridge & Iron in 2015. Toshiba has already flagged a $6.3 billion writedown in preliminary third-quarter estimates due to the cost overruns. To offset the upcoming writedown, Toshiba is also rushing to sell most or even all its prized memory chip business, which it values at at least $13 billion. Chief Executive Satoshi Tsunakawa will hold a news conference at 4:00 p.m. Tokyo time (0700 GMT). A source with direct knowledge of the matter said a one-month extension should be enough to work out differences with auditors. "I understand auditors' skittishness but at the same time I don't think they want to be the reason for Toshiba's failure by keeping refusing to sign off," said the person, who was not authorised to discuss the matter publicly. If it fails to gain approval for an extension, it has to submit the earnings by March 27 or it could face a delisting. Financial regulators declined immediate comment on Toshiba's request. Toshiba is also due to submit this week a report to the Tokyo Stock Exchange on its internal controls in the wake of its latest financial woes as well the 2015 accounting scandal. That could eventually also lead to a delisting if the bourse finds Toshiba's efforts unsatisfactory. -Reuters