Toshiba (TYO:6502) today denied reports of a sale of its Toshiba Medical Systems business and other assets to institutional investors, saying it’s made no deals to sell any of the businesses as it seeks to recover from a $1.3 billion accounting scandal.
Japan’s Nikkei business daily reported yesterday that the Japanese tech conglomerate is looking to shed between 6,000 and 7,000 jobs, most from its lifestyle segment including consumer appliances. The newspaper also reported that Toshiba wants to “drastically” cut operations at its factory in Ome, Japan, and might get out of the TV-making business altogether. Toshiba Tec, which makes point-of-sale systems, is also up for sale to institutional players, according to Nikkei.
Today Toshiba denied the report, saying that it’s “promoting fundamental structural reforms of businesses facing operational challenges” and that “all possible measures are under review, without limitation.”
“However, nothing has been decided at present,” Toshiba said. “The company has not made any such announcements, and these reports are not based on information provided by the company.”
Ex-CEO Hisao Tanaka and 7 other senior Toshiba executives resigned July 21 after admitting that they cooked the books to show inflated profits. Toshiba confirmed last week that it overstated profits going back to fiscal 2008/09 by some $1.29 billion (¥155 billion), reporting a -$314.6 million net loss (-¥37.8 billion) for the last financial year through March.
Today a Japanese regulatory board recommended punishing an Ernst & Young affiliate after its audit of Toshiba failed to spot Japan’s worst accounting scandal in 4 years. Ernst & Young ShinNihon LLC’s auditing was “conspicuously inappropriate,” but there was no indication that Toshiba had pressured the company, the Certified Public Accountants & Auditing Oversight Board found.
Ernst & Young ShinNihon “failed to exercise professional scepticism in auditing Toshiba,” an unnamed senior panel official said.
In a statement in Japanese, Ernst & Young ShinNihon apologized for “causing great concern and trouble,” adding, “We will work to regain public trust with fresh determination and commitment.”
Material from Reuters was used in this report.
