TOKYO -- The operator of Japan's main bourse will need more time to conclude a review before deciding whether to take Toshiba off the list of "securities on alert" now that the conglomerate is engulfed in a financial meltdown.
"There are many problem areas, including the impairment losses resulting from the U.S. nuclear operation and the accompanying internal reports" of potential improprieties, Akira Kiyota, CEO of Japan Exchange Group, told reporters Monday at a regularly scheduled news conference. "It will take a considerable amount of time to investigate the progress of improvement and to release the results."
The Tokyo Stock Exchange, a subsidiary of Japan Exchange Group, branded Toshiba with the alert label in September 2015 following the company's book-cooking scandal. Japan Exchange Regulation, the group's watchdog arm, will conduct the review.
Toshiba's liabilities are expected to exceed assets at the end of March, and the company is busy estimating what may turn out to be bigger losses. Toshiba also raised the possibility that senior management at U.S. nuclear unit Westinghouse Electric applied unwarranted pressure to advance a deal without due diligence.
"I find it very worrying that such a large, prestigious and historic company would be at risk of being delisted" from the TSE's first section, Kiyota said.
The stock exchange will receive a report from Toshiba concerning internal controls as early as March 15, after which Japan Exchange Regulation will launch a probe. The investigation "is expected to last a few months," Kiyota said.
"We will delist if the improvements are insufficient," he said. "If there are no problems, we will cancel the alert designation, and [Toshiba] will remain listed."