• Bloomberg, Kyodo

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Toshiba Corp. must correct at least ¥152 billion in pretax earnings over seven years after an internal accounting probe revealed the company overstated profits under pressure from management.

The amount is almost triple the ¥55 billion writedown the Tokyo-based company estimated earlier and is in addition to ¥4.4 billion in inaccurate entries found by the Tokyo-based company. Toshiba announced summary findings from a third-party committee investigation Monday and President Hisao Tanaka is scheduled to hold a news conference Tuesday.

Toshiba’s market value has declined since May 8, when it withdrew its earnings forecasts, canceled the yearend dividend and widened the accounting probe. The findings raise questions about the involvement of Tanaka, Vice Chairman Norio Sasaki and Atsutoshi Nishida, now an adviser to Toshiba, in the largest Japanese accounting scandal since Olympus Corp.’s accounting fraud surfaced in 2011.

They sought to overstate profits and workers were unable to go against management orders, according to the probe. Executives at the company had “systematic” involvement in the improper accounting, and internal controls failed to operate properly, Toshiba said, citing the report.

Tanaka is widely expected to announce his intention to step down at the news conference Tuesday. His predecessor, Sasaki, is also expected to resign, sources have said.

The company was run by Sasaki for most of the period in question. Sasaki was replaced in 2013 by Tanaka.

The largest single earnings figure to be corrected is ¥85.8 billion in pretax profit in the 2012 fiscal year, according to the probe.

At least eight analysts have suspended their ratings on the company’s shares amid uncertainty about the investigation’s scope.

Shares of Toshiba have declined 26 percent this year, making it the second-worst performer on the Nikkei 225 stock average, which has climbed 18 percent.

The Securities and Exchange Surveillance Commission may recommend that the Financial Services Agency fine Toshiba, while the Tokyo Stock Exchange is expected to designate the company to a special post to alert investors, sources said.

The company initially uncovered irregularities related to “percentage of completion” estimates used on infrastructure projects, including nuclear, hydroelectric, wind-power equipment, air-traffic control and railway systems. Toshiba then appointed a third-party committee to expand the investigation to its visual products, PC and chip businesses.

In May, the company named two lawyers and two certified public accountants to the third-party committee that would be headed by Koichi Ueda, a former investigator with the Tokyo District Public Prosecutor’s Office.

Toshiba had previously projected operating income of ¥330 billion on sales of ¥6.7 trillion for the year that ended in March.

The company will review fiscal 2014 earnings with auditors and submit its result by the end of August, it said Monday.

Toshiba has yet to close its books for the business year that ended in March, and is expected to release an earnings report now that the independent panel has concluded its probe.

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