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How Toshiba cooked the nuclear books

Toshiba cooked books to tune of ¥160 billion after nuclear disaster decimated profit targets: panel http://www.japantimes.co.jp/news/2015/07/19/business/corporate-business/toshiba-cooked-books-to-tune-of-%C2%A5160-billion-after-nuclear-disaster-decimated-profit-targets-panel/#.VbFdnaSqpHx The total amount of operating profits Toshiba Corp. booked through inappropriate accounting in the five years through March 2014 is believed to have reached around ¥160 billion, sources have said.

The third-party panel investigating the electronic giant’s accounting scandal discovered that the padded amount is more than three times the ¥50 billion initially uncovered via Toshiba’s internal probe, but less than the rumored ¥200 billion.

The panel has confirmed that Toshiba President Hisao Tanaka and his direct predecessor, Norio Sasaki, now Toshiba vice chairman, effectively allowed losses to be carried over, as the company set ambitious profit targets for its mainstay businesses, including the infrastructure construction, semiconductor and personal computer divisions, the sources said Saturday.

The panel believes Toshiba cooked its books partly because of clouded prospects for its nuclear power business after the March 2011 disasters sparked a triple meltdown crisis at Tokyo Electric Power Co.’s Fukushima No. 1 atomic plant.

The nuclear crisis eventually forced all of the nation’s 48 commercial reactors offline.

Toshiba had hoped to foster the nuclear power business into a key profit driver.

In addition, Toshiba has also found it difficult to achieve its profit goals due to surges in labor and material costs following the 2011 earthquake and tsunami.

The panel, led by lawyer Koichi Ueda, a former chief prosecutor at the Tokyo High Public Prosecutors Office, will report its findings to Toshiba on Monday.

In its report, the panel is expected to propose that Toshiba appoint lawyers and certified public accountants as outside board members in order to prevent similar accounting irregularities from happening again.

The firm is scheduled to announce the outline of the panel report Monday evening. Tanaka is expected to hold a news conference Tuesday afternoon to explain the wrongdoing and announce his resignation.

In addition to the ¥160 billion in padded profits, Toshiba is likely to be forced to book impairment losses of tens of billions of yen in its semiconductor and other businesses, sources said. Overall, Toshiba’s operating profits are expected to be revised down by some ¥200 billion, the sources added.

July 25, 2015 - Posted by Christina Macpherson | 2 WORLD, Japan, secrets,lies and civil liberties