Toshiba Corp. submitted a report to the Tokyo Stock Exchange on Thursday to explain how corporate governance at the major electronics maker has improved since its accounting scandal came to light, the company said.
The step is aimed at getting its name taken off the bourse’s watch list.
After examining the report, the TSE will decide whether it should remove Toshiba’s shares from the list, which could happen by the end of the year, a source close to the matter said.
When the scandal broke last year, Toshiba was found to have inflated its operating profit by ¥224.8 billion from April 2008 to December 2014, partially by deferring the booking of infrastructure losses.
In September last year, the TSE put Toshiba on its watch list, the heaviest punishment short of delisting, to pressure the manufacturer to strengthen internal controls.
The TSE’s designation is good for a year but can be extended for another six months if the bourse finds Toshiba’s efforts to improve corporate governance insufficient. After the extension, Toshiba must either be stripped of the designation or delisted.
Even after it was put on the watch list, Toshiba failed to properly disclose other inflated profits that were spotted later and had to correct earnings for the year through March 2016 three times after it initially reported them in May.
On Thursday, Toshiba submitted the same report to the Nagoya Stock Exchange, which also has Toshiba on its watch list.
“We will continue to thoroughly implement recurrence prevention measures in all groups and we want to regain (the exchange’s) confidence,” Noriaki Hashimoto, Toshiba’s corporate senior vice president, told reporters.
“We will make efforts to create an organization where accounting problems never happen,” he added.
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