Business / Corporate

Toshiba may book ¥100 billion loss in fiscal 2014 amid accounting scandal

Kyodo

Toshiba Corp. may book a loss of over ¥100 billion for the business year through March 2015 as it grapples with a sweeping accounting scandal, sources familiar with the matter said Wednesday.

The recording of the loss would be necessary as Toshiba revaluates its production equipment and other assets held by the semiconductor, house appliance and nuclear power businesses, the sources said.

Toshiba had put its group net profit estimate for fiscal 2014 at ¥120 billion but it could fall into the red due to the huge loss.

Separately, the Japanese conglomerate will likely make a spate of revisions to its earnings for roughly seven years from fiscal 2008 to December 2014, as an independent panel investigating the scandal concluded that Toshiba had inflated profits by ¥156.2 billion during that period.

The improper accounting practices at Toshiba, the manufacturer of a range of products from personal computers to nuclear power plants, have forced its most recent presidents to step down.

Under the leadership of Chairman Masashi Muromachi, who will likely stay on as president, Toshiba is expected to announce a new management lineup and its earnings estimate for fiscal 2014 early next week, the sources said.

Toshiba’s semiconductor business has been hit by fierce price competition from foreign rivals, and the yen’s weakness has eroded the profitability of its white goods such as refrigerators that are assembled overseas and imported into Japan for sale.

The sources said the ongoing delay in the construction of nuclear power plants in Texas will likely translate into an additional loss for Toshiba’s nuclear power unit, already reeling from the 2011 Fukushima nuclear crisis.

Toshiba had lowered the asset value of a U.S. nuclear energy company in its earnings for fiscal 2013.

Toshiba is considering selling some of its shareholdings and real estate while asking for an additional credit line from major banks in case its creditworthiness deteriorates due to the latest scandal.