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Toshiba ignored possible losses

TOKYO -- Details of accounting irregularities disclosed Friday by Toshiba show that the company failed to record loss provisions for some infrastructure projects, even though officials knew in advance that they could bleed red ink.

     The scandal now raises the question of accountability on the part of management.

     A smart-meter contract awarded by a power company in September 2013 topped the list of nine questionable projects in infrastructure that forced a restatement of past earnings. It brought earnings down by 25.5 billion yen ($204 million at today's rates). An electronic toll collection system deal that came in second was to blame for 14.4 billion yen.

     For the smart-meter deal, Toshiba said it "was aware at the time of receiving the order of the possibility it would make a loss" but did not make provisions for a contract loss, "despite the absence of any reasonable grounds for failing to do so."

     Toshiba said back in May, when the scandal broke, that operating profits for the nine cases for a three-year period through March 2014 would be slashed by more than 50 billion yen. The latest count lifted the figure to 51.2 billion yen for the five years through March 2014. The amount may swell further.

     A third-party panel looking at the books of the infrastructure, computer, chip and television businesses is expected to issue a report in mid-July.

(Nikkei)

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