Toshiba has expanded its investigation of internal accounting irregularities to include Westinghouse Electric and all of its other subsidiaries - raising fresh questions over the extent of the problems that have already pushed its shares down by a fifth.
News of the wider probe follows a decision by the Japanese industrial group to withdraw its earnings guidance and scrap its year-end dividend, after it found improper accounting of costs on certain infrastructure projects.
Two days ago, the company said it may have to mark down three years of operating profit by at least Y50bn ($417m).
In a hastily arranged news conference late Friday, Hisao Tanaka, Toshiba's chief executive, apologised for the problems, saying he will cut his monthly pay by 50 per cent until the company can resume its dividend payout.
"Our biggest priority is to recover market confidence as early as possible," Mr Tanaka said. He added that the company had appointed a four-member panel of external lawyers and accountants, in addition extending its internal probe.
Shares in Toshiba have fallen 20 per cent since the company flagged up the accounting issues in early April.
On Friday, Toshiba also gave a breakdown of the Y50bn markdown estimate, saying it was derived from nine cases of accounting irregularity in its power systems, social infrastructure and community solution business. Mr Tanaka said most of the cases involved domestic projects.
Initially, the company said an internal probe had found that construction costs on certain infrastructure-related projects had been underestimated and that losses from the construction work were "not recorded in a timely manner".
Mr Tanaka said on Friday that "various other doubts" over the way expenses and financial appraisals were handled had emerged, necessitating a widening of the probe to all divisions and overseas units - including Westinghouse, its US nuclear power company. These "doubts" came to light after the company studied about 250 cases, including some overseas.
But Mr Tanaka declined to comment when asked if there were signs that the accounting figures had been tampered with.
Toshiba said it did not know when the third-party panel investigation will conclude. However, the company needs to report its full-year earnings by the end of June to meet regulations by the Tokyo Stock Exchange.
It had previously projected a 136 per cent gain in net profit to Y120bn for the fiscal year that ended in March, and a 3 per cent gain in sales to Y6.7tn.
Toshiba's current accounting irregularities come less than two years after it disclosed that its medical unit had overstated earnings over a six-year period.
Investor scrutiny of bookkeeping practices at Japanese companies has increased following a $1.7bn accounting scandal at medical equipment maker Olympus in 2011.
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