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Toshiba drops most since 2012 after accounting probe starts
[TOKYO] Toshiba Corp fell the most in more than two years after the company said it would appoint a committee to investigate possible problems with its accounting.
The maker of nuclear reactors, chips, appliances and electronics dropped as much as 9 per cent, the most since July 2012. The shares traded 5.7 per cent lower at 483.2 yen as of 10.33am in Tokyo.
Toshiba said Friday after the market closed that it would form a panel to examine the "reasonableness of estimates" when using the percentage-of-completion accounting method for some projects.
The effect on earnings hasn't been determined, according to the Tokyo-based company's statement.
"The announcement doesn't give us a good impression of Toshiba," said Yukihiko Shimada, an analyst at SMBC Nikko Securities Inc. "A sense of uncertainty will spread about the credibility of the company's accounting."
Toshiba got about 11 per cent of operating income from its power and social infrastructure business in the year started April 1, 2013.
The investigation will take about a month, the company said.
"Some items in the accounting method for work completed needed to be re-examined," Naomi Furuya, a spokeswoman for Toshiba, said on Friday. "This was discovered in March in a routine accounting survey." She declined to give further details.