Toshiba posts $318m loss in wake of profit-padding scandal

Tokyo: Crisis-hit Toshiba said Monday it would book a $318 million loss for its latest fiscal year in the wake of a billion dollar profit-padding scandal. The vast 140-year-old conglomerate said that its annual loss for the year to March 2015 would be 37.8 billion yen ($318 million), reversing a previously expected 120 billion yen annual profit. Toshiba left unchanged its previously announced 170 billion yen operating profit on sales of 6.65 trillion yen for its latest fiscal year.  But it said it could not supply forecasts for the current year to March 2016.

Investors appeared to cheer the finalised figures as bringing a sense of closure to the saga, with Toshiba's Tokyo-listed shares jumping 3.17 per cent to 357.6 yen in morning trade even as the broader market turned lower. The revised results come after months of delay as an outside panel probed the firm's finances amid revelations that top executives pressured underlings to systematically inflate profits by about $1.2 billion since the 2008 global financial crisis. One of the most damaging accounting scandals to hit Japan in recent years, the case prompted an incumbent president and seven other top executives to resign after the company-hired panel found top management complicit in a years-long scheme to pad profits.

The embarrassing findings came just months after Japan adopted a long-awaited corporate governance code aimed at improving firms' transparency. Best known for its televisions and electronics, including the world's first laptop personal computer and DVD player, Toshiba has more than 200,000 employees globally and also operates in power transmission and medical equipment. The company has asked a host of renowned Japanese business leaders to act as outside directors in a management overhaul to improve its corporate culture. Toshiba is to hold a shareholders meeting at the end of this month.

Last month, Toshiba was booted from a stock index launched to highlight firms with the best return on equity and other shareholder friendly criteria. Toshiba's business was dented by the financial crisis, while the 2011 Fukushima disaster squashed demand for atomic power at home in a big blow to the firm's key nuclear division. Top executives complained of "shameful results" that could not be made public.