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August 11, 2015

Toshiba to book £500m loss after bookkeeping scandal – sources

Exit of chief executive will be followed by a generous writedown.

By Jimmy Nicholls

Toshiba will book a loss of 100bn yen (£500m) for its unprofitable segments as the company continues to reel in the wake of an accounting scandal.

People familiar with the matter told Japanese financial paper the Nikkei that the conglomerate’s overall earnings are expected to be zero, and might even end up negative when these losses are combined with a correction of a previous earnings reports.

Among the divisions affected are those handling semiconductors, white goods and American nuclear energy, with the struggling segments said to be booked separately from the earnings correction.

This correction will see the previous forecast of 330bn yen operating profit reduced to between 150bn yen and 200bn yen.

The accountancy scandal as Toshiba was brought to a head last month as chief executive Hisao Tanaka confirmed he would resign alongside vice chair Norio Sasaki, after an independent panel found the company had booked 150bn yen of false profits.

At the time a statement posted on the firm’s website said: "Toshiba Corporation expresses sincere apologies to our shareholders, customers, business partners and all other stakeholders for any concern or inconvenience caused by the investigation into the appropriateness of its accounting."

In the wake of the writedown analysts have said it will likely sell its nuclear arm Westinghouse Electric, in which Toshiba bought a majority stake for $5.4bn (£3.5bn), but it is thought finding a buyer could be tricky.

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Toshiba has yet to respond to requests for comment from CBR.

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