TOKYO -- Even after revealing details of past accounting irregularities, Toshiba executives left many investors puzzled at the company's annual shareholders meeting Thursday as the questions of who did it and why remained unanswered.
To the infrastructure business, whose bookkeeping was already under a spotlight, Toshiba added the semiconductor, personal computer and television segments.
Chief Financial Officer Keizo Maeda addressed the irregularities in a presentation peppered with such jargon as "standard cost" and "cost variance" while showing slides on a large screen.
In the infrastructure business, suspicion is on the appropriateness of profit estimates based on the percentage-of-completion accounting method used for long-term construction projects. Aggregate operating profit will likely be revised downward by as much as 51.2 billion yen ($409 million) for five years through fiscal 2013.
In TVs, Toshiba may have booked a profit while delaying payment for a portion of parts purchases to the following fiscal year. Similarly, the booking of promotional and adverting expenses may have been pushed back.
In PCs, the focus is on how the profit was booked. Toshiba purchases computer parts in bulk at a discount, sells them to fabrication and assembly companies, and then buys finished products from them. If finished-product inventories pile up, profit stemming from parts transactions would rise accordingly, possibly buoying profit figures for a given period above what they should be.
In chips, Toshiba's internal probe found that failing to update costs may have led to padded profit. Discrete semiconductors and other offerings were stockpiled for future sale to customers after plant closings, but the company may have failed to record a valuation loss after their prices fell.
Thursday's meeting left many investors simply frustrated after dragging on a record three hours and 16 minutes. Besides the detailed accounts of how profits may have been padded, the only new revelation was that the Securities and Exchange Surveillance Commission started looking into the Toshiba case back in February.
A shareholder expressed disappointment after the event, complaining of not having understood any of the technical descriptions.
"There was no explanation of what we want to know most: why it happened and who is to blame," this investor said.
A third-party committee investigating whether profit-padding was intentional, and whether accounting irregularities were orchestrated at the organizational level, will report its findings in mid-July.
President Hisao Tanaka did not comment on who in management should take responsibility.
The report from the outside committee will clarify whether directors had knowledge of the problem, he said. On that basis, the company will likely decide who was responsible, including former executives.
Toshiba will elect a new board at a special shareholders meeting planned for September and will consider increasing outside directors from the current four.
It has estimated a total operating profit downgrade of some 55 billion yen so far, but the impact could be bigger if the financial authorities impose penalties.
"This is the worst crisis since the company's founding," Tanaka repeatedly said at Thursday's meeting.