Toshiba inflated profit on 9 projects, probe shows

Toshiba inflated profit on 9 projects, probe shows
Toshiba Corp President and Chief Executive Officer Hisao Tanaka bows during a news conference after an opening ceremony of the company's Hydrogen Energy R&D Center in Tokyo April 6, 2015.

TOKYO - Toshiba overstated operating profit for at least nine infrastructure projects, most of which were in Japan, according to its latest update of a probe into accounting irregularities.

"I apologise for the trouble we have caused our shareholders, among others," President Hisao Tanaka said Friday in a news conference. This is the first time the company's top management discussed the issue in public.

The Tokyo-based machinery maker admitted to irregularities April 3 and created a committee to investigate roughly 250 of its projects in Japan and abroad. It said late Wednesday that it likely overstated operating profit by over 50 billion yen ($415 million) between fiscal 2011 and fiscal 2013 by underestimating costs.

The Power Systems business is responsible for a 6 billion yen discrepancy across four projects, according to the breakdown revealed Friday. Four projects under the Social Infrastructure Systems business accounted for about 30 billion yen, and a project under the Community Solutions business was tied to another 14 billion yen.

Toshiba also launched an independent committee that day to expand the scope of the probe. "Internal controls may not have functioned, due to the high priority placed on meeting budget targets," Tanaka said. He said he will wait for the panel's report to judge whether accounting records were tampered with intentionally.

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