Danny McCance 20 Oct 2017 05:19pm

Japan's securities authority to investigate Toshiba

The Securities and Exchange Surveillance Commission (SESC) will launch an investigation into the electronics giant’s financial reporting practices

The probe, reported by the Financial Times, comes days before Toshiba has to seek shareholder’s approval for recent financial statements in an extraordinary general meeting on 24 October.

The vote is required after auditor PwC Aarata’s recent “adverse opinion” raised questions over the company’s 2016 financial reports.

The concerns were over what Toshiba described as a failure to reach an agreement on the timing of a loss recognition, which related to the company's former subsidiary Westinghouse's acquisition of CB&I Stone & Webster.

Problems in the relationship began in April, when Toshiba published its financial results for the previous year without auditor approval.

Toshiba then announced in May it was still working on its financial reports, 45 days after it had already missed the deadline for them.

At the general meeting, stakeholders will also be asked to vote on the election of Toshiba’s chief executive officer and president, Satoshi Tsunakawa, the chief financial officer Masayoshi Hirata and eight other senior managers.

The directors were re-elected by default following the lack of business reports and financial statements in last year’s ordinary shareholders meeting.