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Toshiba shares jump 6% after accounting probe
[TOKYO] Shares in Toshiba soared almost 6.0 per cent shortly after the opening bell Tuesday following a revelation that the firm "systematically" inflated profits over several years.
They spiked 5.78 per cent to 398.6 yen at the Tokyo Stock Exchange after a team of investigators the firm hired reported years of accounting irregularities.
The shares hovered at 390.0 yen, up 3.50 per cent, some 20 minutes after the opening bell, amid reports that the firm's top managers will resign to take responsibility.
They outpaced the Nikkei index's rise of 0.50 per cent to 20,753.79.
Toshiba's sharp rise came after a third-party panel issued a report Monday to spell out the firm's wrongdoings, easing a sense of uncertainty after the firm withdrew in May its earnings forecasts and said it might have to revise past financial statements due to possible accounting irregularities.
The firm's top executives were involved in "systematically" inflating profits by US$1.2 billion over several years, the panel said in a stinging indictment of one of Japan's best-known firms.
Current president Hisao Tanaka and his predecessor are both expected to resign over the profit-padding after investigators uncovered irregularities stretching back to 2008.
The panel, headed by a former Tokyo prosecutor, painted a picture of a corporate culture where underlings could not challenge powerful bosses who were intent on boosting profits at almost any cost.
The government's securities watchdog agency will consider a recommendation to the Financial Services Agency to impose a fine on Toshiba, according to major media, including the Nikkei and the Asahi Shimbun.
The Tokyo Stock Exchange is expected to designate the company to a special post to alert investors, Kyodo News said.