Toshiba under investigation by Japan's securities watchdog
Group's accounting, reporting practices being reviewed
TOKYO -- Japanese authorities have launched a probe into Toshiba's accounting and reporting practices for the fiscal year ended in March, in order to determine whether the troubled company appropriately handled the massive losses posted by its U.S. nuclear power unit Westinghouse Electric.
The Securities and Exchange Surveillance Commission is looking into how Toshiba produced its fiscal 2016 securities report, which was released in August. The document was originally due at the end of June, but Toshiba and its auditor clashed on when the Tokyo-based company became aware of the losses at Westinghouse. The auditor eventually gave a qualified opinion, endorsing the report "with the exception of a specified concern."
Westinghouse was removed from Toshiba's consolidated books after it filed for bankruptcy protection in the U.S.
The securities watchdog will review the "specified concern" and exchanges between Toshiba and its auditor. It aims to determine what led to the auditor's unconventional decision to offer a qualified approval, as well as why reports from previous years were repeatedly postponed.
The investigation has not been triggered by any new discoveries or allegations.