Toshiba Loses £209m After Accounting Scandal
Fallout from accounting scandal continues to rock Japanese firm after it posts annual loss of £209m
The accounting scandal that has seen the departure of the chief executive of Toshiba continues to cause problems for the Japanese firm.
The company has now posted a full year net loss of $318 million (£209m) after a delay caused by the scandal and the sale of another unit in an effort to improve its finances.
Accounting Scandal
Toshiba began an official probe in May this year which found that the company had overstated operating profits by a total of 151.8 billion yen (£780m), roughly triple the figure Toshiba had initially estimated.
Even worse, the chief executive of Toshiba was found to have been aware of a profit inflation scheme going back to 2008. He and a number of other executives resigned following the release of an independent inquiry findings.
“It has been revealed that there has been inappropriate accounting going on for a long time, and we deeply apologise for causing this serious trouble for shareholders and other stakeholders,” said Toshiba at the time.
In an effort to improve its bottom line, Toshiba sold a 4.6 percent stake in Finnish firm Kone (a lift maker) for $946.2 million (£620m).
The company posted an annual loss for the year to March 2015 of 37.8 billion yen ($318m or £209m), reversing a previously expected 120 billion yen (£6.5bn) annual profit.
Revenue was up at $55.4 billionn (£36.3bn).
Strong UK
“While the US economy lost some momentum in the second half of FY2014 (October-March), the UK witnessed a strong performance and the Eurozone sustained a gradual recovery,” said Toshiba. “Despite a slowdown in China, the emerging economies as a whole saw a continued gradual recovery, reflecting solid growth in Southeast Asia and India.
“In Japan, the recovery in domestic demand remained slow, due to the still lingering effects of the increase in the consumption tax and a fall in real income,” it added. “Despite improved performances by export-driven large enterprises, the industrial economy as a whole remained flat, reflecting deteriorated profitability at small and medium enterprises, which largely rely on domestic demand, as did the service economy.”
Toshiba is a manufacturing conglomerate that has 200,000 staff and makes a range of products including televisions, DVD players and electronics, as well as laptop computers. It also makes medical equipment and equipment for the power utility market.
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