Japan regulators set to slap Toshiba with record $57 million fine: source

Wed Nov 18, 2015 3:00am EST
 
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By Takahiko Wada

TOKYO (Reuters) - Japan's securities watchdog is likely to recommend Toshiba Corp be fined about 7 billion yen ($57 million), a source familiar with the matter said on Wednesday, in what would be a record in the country for accounting-related violations.

The recommended fine would exceed the previous record of 1.6 billion yen paid by industrial conglomerate IHI Corp in 2008. But critics have said the amount is still light compared with what could be levied by U.S. regulators in a similar case.

Toshiba has set aside around 8.4 billion yen to cover administrative penalties and the impact on its earnings is expected be minimal.

The Securities and Exchange Surveillance Commission will make the recommendation to the Financial Services Agency as early as this month, the source said, declining to be identified as he was not authorised to speak to media on the matter.

Toshiba, whose business spans household electronics to nuclear power, has said it inflated profits by about 155 billion yen over about seven years. The fine has been imposed for violations for the past five years - in line with the extent of authorities' power, the source said.

Third-party investigators blamed the scandal on over-reaching and a culture that discouraged employees from questioning authority. Toshiba has since appointed more outsiders to its board of directors and this month sued five former executives over mismanagement.

News of the fine recommendation was first reported by the Nikkei business daily.

(Reporting by Takahiko Wada; Writing by Ritsuko Ando; Editing by Stephen Coates and Edwina Gibbs)

 
The logo of Toshiba Corp is seen at its headquarters in Tokyo, Japan, November 6, 2015.  REUTERS/Yuya Shino -