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Toshiba needed to pull itself out of negative net worth to stay on the stock market.
Business

Toshiba demoted to Tokyo exchange's second tier

Troubled group pushes back release of annual results yet again

| Japan

TOKYO -- Toshiba shares will be reassigned to the Tokyo Stock Exchange's second section on Aug. 1, the bourse said Friday, demoting the industrial group after yet another delay in the release of its latest annual results.

Toshiba on Friday postponed issuing its securities report for the year ended March 31 until Aug. 10. The Kanto Local Finance Bureau approved the extension beyond the June 30 deadline.

This marks the fifth time the Tokyo-based company has pushed back the release of the report and quarterly earnings statements.

The TSE requires companies with negative shareholder equity to be demoted to the second section -- a rule that Sharp ran afoul of last year. The latter company is now readying to apply to return to the first section. A drop down to the second section means a company is automatically removed from the Nikkei Stock Average and the broader Topix index.

Also on Friday, Toshiba revised up its estimated negative shareholder equity as of the March fiscal-year-end to 581.6 billion yen ($5.22 billion) from 540 billion yen. Its forecast group net loss widened to 995.2 billion yen from 950 billion yen owing to increased provisions against litigation and higher loan guarantee liabilities for Westinghouse Electric, a former subsidiary that filed for Chapter 11 bankruptcy protection in the U.S. in March.

Toshiba's delays in finalizing its annual results reflect continued disagreement with auditor PricewaterhouseCoopers Aarata over when to recognize losses on Westinghouse nuclear power plant projects.

The TSE is probing Toshiba's internal controls and will wait for the securities report before determining whether to maintain the company's listing. A decision is not expected until September at the earliest. 

Toshiba President Satoshi Tsunakawa told reporters that the industrial group "is working to strengthen our internal controls, and we hope to keep our position as a listed company."

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