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Toshiba announces probe into US nuclear deal

Cites possible 'inappropriate' pressure from Westinghouse officials

| Japan

TOKYO -- Toshiba has launched an investigation into possible inappropriate conduct over the 2015 acquisition of a U.S. nuclear services company that led to its recent massive write-down.

The probe involves the process of assigning fair market value to assets and determining goodwill for subsidiary Westinghouse Electric's acquisition of CB&I Stone & Webster. Internal reports sent to Toshiba's audit committee last month suggested that internal controls related to the process were inadequate, the company said Tuesday.

The statement did not go into detail, noting that the matter is still under investigation. But an insider said Toshiba suspects that the goodwill from the deal, or the difference between the purchase price and Stone & Webster's net assets, may have been underestimated. The reports, came from within the company, could have been intended to point out a miscalculation that led to the massive losses.

Delays on the American company's projects, owing to tougher regulations in the wake of the 2011 Fukushima Daiichi nuclear disaster, led to huge cost overruns, forcing Toshiba to write off all of the goodwill on the deal.

Toshiba also raised the possibility that senior management at Westinghouse exerted "inappropriate pressure" to continue the process, possibly to cover up the reports. Toshiba's audit committee has retained an outside law firm to look into the matter. The investigation is expected to take about a month.


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