Watchdog members claim Toshiba FY2016 accounts contain misstatements

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Some members of Japan’s securities watchdog are calling for an investigation into Toshiba Corp’s fiscal 2016 results, claiming that they contain significant misstatements, sources close to the matter said Saturday.

The members of the Securities and Exchange Surveillance Commission have distributed a statement urging its officials to quickly begin investigations into Toshiba’s financial results for fiscal 2016 in which the company booked huge losses stemming from its now-bankrupt U.S. nuclear unit Westinghouse Electric Co.

Without an investigation, the members warn that the credibility of the security market will be affected.

In August, Toshiba submitted its delayed financial results for fiscal 2016 after its auditor PricewaterhouseCoopers Aarata LLC issued an “opinion with qualifications” on Toshiba’s annual earnings report, meaning the figures are presented fairly overall and that only minor problems exist.

The auditor, however, issued an “adverse opinion” on Toshiba’s internal controls since the company overlooked massive losses related to its bankrupt U.S. nuclear unit.

PwC Aarata said in its auditor report attached to Toshiba’s annual financial statement that the Japanese firm “should have booked a respectable degree or all” of the massive losses stemming from the U.S. nuclear unit in fiscal 2015 instead of the following year.

Members of the watchdog calling for an investigation insist that an “opinion with qualifications” should be interpreted as meaning Toshiba’s accounts have “material misstatements partially.” They have warned that such an opinion should not be left unquestioned, the sources said.

Members of the securities watchdog make final judgments on whether recommending charges or criminal complaints are necessary. It is extremely rare for members to urge officials to carry out investigations, and officials have taken a more cautious view on quickly moving to an inspection.

© KYODO

Source  :  Japan Today

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