Toshiba Corp. is considering releasing unaudited full-year earnings results on the May 22 deadline despite having no clear prospects of approval from its auditor, according to sources close to the matter.
PricewaterhouseCoopers Aarata LLC continues to disagree with Toshiba over losses related to its U.S. nuclear unit after the auditing firm issued a disclaimer for the company’s earnings result for the April-December period last month.
May 22 is the de facto deadline for the embattled conglomerate to release its earnings for the fiscal year that ended March 31.
The electronics giant is aiming to switch to another auditing firm to seek approval by the end of June, the deadline to submit its full-year financial statements, including an earnings report. But the company is struggling to find a replacement.
To avoid the risk of being delisted from the Tokyo Stock Exchange, Toshiba is mulling applying for a postponement or even considering accepting any form of auditor opinion if it can avoid another disclaimer, the sources said Monday.
If listed companies are unable to release their earnings reports after 50 days from the close of the accounts, they are required by the TSE to provide an explanation.
Toshiba is reeling from huge losses related to its troubled U.S. nuclear unit Westinghouse Electric Co. which filed for Chapter 11 bankruptcy protection in March.
Last month, Toshiba reported earnings for the April-December period after postponing the release twice since February. But the report came with a disclaimer from PwC Aarata, raising questions about the credibility of the results.
Toshiba is still looking to hire a second-tier accounting firm to replace PwC Aarata, but even if it finds one it is likely to face the risk of a major delay in an earnings release.
In March, the company said it could post a group net loss of ¥1.01 trillion ($8.9 billion) for the fiscal year that ended March 31, the largest ever for a Japanese manufacturer, and fall into a negative net worth of ¥620 billion at the end of March due to losses in the U.S. nuclear power business.
Shares of Toshiba have been on the TSE’s watch list following its accounting scandal in 2015. A major delay in releasing earnings or announcing full-year earnings results with another disclaimer from its auditor could increase the risk of the company being delisted from the Tokyo bourse.