• Staff Report, Kyodo


Toshiba Corp. said Friday that it will miss the deadline of June 30 to submit its annual financial statement, saying its auditor needs additional time to check the figures, the company said.

The struggling Tokyo-based firm said it gained approval from the regulator, the Kanto Local Finance Bureau, to extend the new deadline to Aug 10.

The annual financial statement, which includes an earnings report, is required by law to be filed with an auditor’s opinion within three months from the end of the fiscal year.

Toshiba’s auditor has refused to sign off on the financial statement and earnings report as the two sides have been unable to agree on when Toshiba recognized its massive losses related to Westinghouse Electric Co., which filed for bankruptcy protection in March.

“The company expresses its sincerest apologies to its shareholders, investors and all other stakeholders for any concerns or inconvenience caused,” Toshiba said in a statement.

Toshiba President Satoshi Tsunakawa said the Westinghouse’s bankruptcy protection requires a special accounting procedure, which will continue by the end of July.

“We will fully cooperate with our independent auditor and will make our utmost efforts to submit the financial report, but the auditing process is expected to take some time,” Tsunakawa told a news conference later in the day.

Toshiba will be delisted from the Tokyo Stock Exchange if it misses the new deadline unless the regulator approves another deadline extension request.

In 2015, the firm also missed the end of its June deadline and twice requested delays.

While potential delisting looms, the TSE announced on the same day that Toshiba shares will be demoted to the bourse’s Second Section as of Aug. 1. This is because the conglomerate, reeling from the huge losses tied to Westinghouse, has fallen into negative net worth for the fiscal year ended March 31, according to the TSE.”As for the demotion, … we’ll have to make sure that our credit won’t be damaged,” said Tsunakawa.

Failing to eliminate the negative net worth by next March will also get Toshiba delisted from the TSE.

Also on Friday, the firm revised a forecast of the fiscal 2016 results, saying that its negative net worth would expand to ¥581 billion from the previous estimation of ¥540 billion, following a negotiation with a U.S. utility firm on the parent company guarantee for Westinghouse.

In a bid to revive its financial standing, Toshiba has put its profitable Toshiba Memory Corp. chip unit up for sale.

Earlier this week, the company chose a Japan-U.S.-South Korean consortium as the preferred bidder for the operation but its venture chip production partner, Western Digital Corp., is strongly opposed to the plan. Toshiba is aiming to finalize the deal by next Wednesday when it holds its shareholders’ meeting.

In late May, Toshiba was forced to apologize to investors for not being able to provide its fiscal 2016 earnings report at the upcoming shareholders’ meeting.

“At this point, completion of the auditing is expected to take some more time … Toshiba recognizes that it will not have the lead time required to prepare and provide the business report” for the ordinary shareholders meeting, Toshiba said in a statement at the time.

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