Toshiba shares enjoy a six per cent surge on expectations it may gain a partial endorsement from its auditor for its annual financial results after disagreements over accounting for the much of the year. As Ciara Lee reports, such a step would lessen, but not remove, the risk of a delisting.
Jumping six percent on Monday - finally some good news for Toshiba shareholders. According to Japanese media the company may get a partial endorsement from its auditor for its annual financial results. Disagreements have delayed Toshiba results and the company was demoted to the second section of the Tokyo bourse this month. PWC took over as its auditor in June last year. But sources say it's queried whether Toshiba should have recognised multi-billion dollar losses at U.S. nuclear arm Westinghouse earlier than last December. A writedown at Westinghouse and other liabilities linked to the nuclear unit have pushed Toshiba into negative shareholder equity of $5.2 billion (SOUNDBITE) (English) RICHARD HUNTER, WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, SAYING: "The Westinghouse problem remains, the problems with the balance sheet remains. If the audit is passed it simply lessens the risk that Toshiba will be delisted. Having said that in terms of an investment, this is very much the thin end of the wedge, there is a long way to go, with Westinghouse in particular proving the main issue." PwC is reportedly looking at issuing an "opinion with qualifications" - given where only minor problems exist - by a bourse-imposed deadline on Thursday It reduces the risk of a delisting that would complicate Toshiba's ability to sell its chip business. Both firms declined to comment Toshiba will be automatically delisted if it ends the current year with negative shareholders' equity.