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Toshiba not expected to submit mandatory securities report by June 30 deadline

JIJI

It appears Toshiba Corp. will have a difficult time meeting the legal deadline at the end of this month for submitting a securities report for the 2016 business year to the Kanto Local Finance Bureau.

The struggling electronics and machinery maker is still unable to finalize its 2016 business results due to a disagreement with its auditor, PricewaterhouseCoopers Aarata LLC, or PwC Aarata, over huge losses at Toshiba’s U.S. nuclear business unit Westinghouse Electric Co., informed sources said.

It would be the fifth time for Toshiba to fail to submit a securities report by a deadline since the company was first rocked by an accounting scandal in the 2014 business year.

Toshiba is expected to apply for an extension of the looming deadline by one or two months, while PwC Aarata has not specified when its auditing of Toshiba’s 2016 performance will be completed.

The delay in submitting the report is expected to affect the Tokyo Stock Exchange’s examination of whether Toshiba’s listing should be maintained.

If Toshiba is confirmed to be in negative net worth even before the submission of the 2016 report, the TSE may demote the company’s stock to the second section in August, prior to its possible eventual delisting, securities industry officials said.

Toshiba is due to hold a general shareholders meeting June 28, when the company plans to skip reporting its 2016 results but to present earnings forecasts for the 2017 business year, sources familiar with the situation said.

U.S. proxy advisory firm Glass Lewis & Co. has advised clients holding Toshiba shares to oppose the management-proposed reappointments of the nine current Toshiba directors, including President Satoshi Tsunakawa.