Japan lawmakers urge bourse, regulators to be tough on Toshiba
By Takahiko Wada
TOKYO (Reuters) - Japanese lawmakers on Wednesday called for a tough regulatory response to Toshiba Corp's (6502.T: Quote) second postponement of its annual results over accounting woes, saying the scandal could erode foreign investor confidence.
Regulators are likely to penalize the laptop-to-nuclear power conglomerate with a fine after an independent probe found that the company had overstated past results by $1.2 billion over several years, sources familiar with matter have said.
Japan's regulators are, however, often perceived as softer than Western counterparts when punishing corporate misdeeds."The scandal is a severe problem that could lead to a loss of credibility from foreign investors", Masahiko Shibayama, head of the Liberal Democratic Party's treasury and finance division, told reporters after a meeting of lawmakers and regulators.
The Tokyo Stock Exchange would consider putting Toshiba's shares on a watchlist for possible delisting if there were further delays in reporting results, Shibayama quoted a bourse official as saying in the meeting.
Forced delistings are, however, rare. Kazuhiko Toyama, who advised the government on new corporate governance guidelines that seek to improve shareholder returns, said a delisting would not be the answer.
"The exchange should not delist Toshiba because the direct victims of a delisting would be the shareholders and not the company," he told a news briefing on corporate governance.
The accounting scandal is Japan's biggest since 2011 when camera and medical device maker Olympus Corp (7733.T: Quote) was found to be involved in a $1.7 billion scheme to conceal two decades of investment losses. Olympus was subsequently fined 700 million yen ($5.8 million) and some former executives were handed suspended jail sentences.
Toshiba put off plans to announce annual results on Monday, citing newfound accounting errors, receiving a government extension to submit them by Sept. 7. It said the new errors were not huge. Continued...