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Toshiba suffers net loss amidst accounting scandal

Posted: 08 Sep 2015 ?? ?Print Version ?Bookmark and Share

Keywords:accounting scandal? net loss? shareholder? operating profit?

It came as no surprise that Toshiba registered an annual loss following a reduction in the value of assets due to an accounting scandal, which brought down its president and two predecessors, Bloomberg reported.

In July, an independent investigation committee revealed the worst accounting scandal in Toshiba's 140-year history. The committee reported that the company had overstated its operating profits by 151.8 billion yen (about $1.22 billion) cumulatively over the period covered by the fiscal years 2008 to 2014.

The company posted a net loss of 37.8 billion yen (about $316.9 million) in the 12 months that ended in March. This is significantly lower than its previous net income of 50.8 billion (about $426 million) recorded last year. Toshiba revised its earnings for the last three fiscal years. It also did not declare dividend or earning forecast for 2015.

The Japanese company posted the result months later than initially scheduled. It did so after cancelling its May forecast and after expanding its investigation on accounting anomalies.

Net income from Toshiba's business units, which include laptop computers, computer memory chips and nuclear reactors, was drained after adjusting the company's earnings. The company had apologised repeatedly to shareholders, customers, business partners and others affected by the scandal.

"Going forward, we will renew our commitment to our original management policy, which puts the highest priority on human life, safety and compliance," Toshiba said in a statement released July.

As of yesterday morning, Toshiba's shares rose to as high as 3.6 per cent to 359 yen (about $3). The company also announced an extraordinary general meeting to be held at the end of the month.

Last month, the company said it was anticipating a net loss for the previous year, but it did not reveal a specific amount.

Toshiba picked Masashi Muromachi as its new president following the interim leadership of the former chair in July when his predecessor resigned.

The company had previously said it would examine measures to prevent such events happening again and implement them thoroughly. It also extended the investigation to include other Toshiba businesses.

- Stephen Padilla
??With inputs from Peter Clarke

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