Market News
Oct. 11, 2017 TSE Cancellation of Designations as Securities on Alert and Securities Under Supervision (Examination): TOSHIBA CORPORATION
The designations as Securities on Alert and Securities Under Supervision (Examination) have been cancelled as below.
| １．Issue Name | TOSHIBA CORPORATION stock (Code: 6502, Market Division: 2nd Section) |
| ２．Date of Cancellation of Designation as Securities on Alert | Oct. 12, 2017 (Thu.) |
| Provision | Securities Listing Regulations, Rule 501, Paragraph 7 (Due to falling under cases where the Exchange does not deem there to be any problem in the internal management system, etc. on the basis of the written confirmation of the internal management system resubmitted by the listed company) |
| ３．Date of Cancellation of Designation as Securities Under Supervision (Examination) | Oct. 12, 2017 (Thu.) |
| Provision | Securities Listing Regulations, Rule 601, Paragraph 1, Item 11-2, Sub-item e (Due to the Exchange not deeming that the internal management system, etc. did not improve on the basis of the written confirmation of the internal management system resubmitted by the listed company) (Note)TOSHIBA CORPORATION stock is still in the grace period pertaining to delisting due to liabilities in excess of assets. If the company is in excess liabilities as of the end of Mar. 2018 and falls under the delisting criterion, the stock shall be delisted, regardless of the result of this examination. |
| ４．Reason | (Background) TOSHIBA CORPORATION (hereinafter "the Company") disclosed an investigation report of the Independent Investigation Committee concerning inappropriate accounting processing on Jul. 20, 2015 and disclosed corrections to past earnings reports, etc. on Sep. 8, 2015. As such, TSE deemed that improvement of the internal management system, etc. of the Company was highly necessary and designated its stock as a security on alert on Sep. 15, 2015. On Sep. 15, 2016, after one (1) year elapsed since the designation, the Company submitted a written confirmation of internal management system. TSE examined the submission and deemed that it still needed to verify the implementation and progress of the Company’s measures toward improvement, and decided to continue the stock's designation as a security on alert on Dec. 19, 2016. On Dec. 27, 2016, the Company disclosed the possibility of huge losses at its subsidiary. (As a result, on Mar. 29, 2017, the subsidiary filed for a reorganization process under Chapter 11 of the United States Bankruptcy Code and was deconsolidated.) Due to these events, since Feb. 14, 2017, the Company twice postponed the deadline for submitting its quarterly report. (The Company later received disclaimers of conclusion on its quarterly reports, a qualified opinion on its annual securities report, and an adverse opinion on its internal control report.) On Mar. 15, 2017, after one (1) year and six (6) months elapsed since the designation as a security on alert, the Company resubmitted the written confirmation of internal management system. (Issues recognized in the internal management system, etc.) In light of the above events, the following issues were recognized in the internal management system, etc. of the Company(Note): i) Distortion of management policy, superficial corporate governance, and inadequate awareness of job responsibility and compliance ii) Carelessness in management decision processes iii) Deviation from appropriate accounting treatment and severely inadequate organizational structure for disclosure iv) Poor management of its subsidiaries (especially overseas subsidiaries) (Note)As a result of examining the Company's financial reporting system as to the series of events regarding the auditor’s opinions, TSE did not deem there to be any significant deficiencies in the Company's financial reporting system. (Improvement of the internal management system etc.) TSE reviewed the written confirmation of the internal management system resubmitted by the Company after one (1) year and six (6) months elapsed since the designation as a security on alert. As a result, since said designation, TSE recognized that the Company has enacted measures toward improvement, as provided below in summary: i) To prevent and deter the CEO from demanding to achieve irrational management goals inconsistent with the actual business conditions and the distorted management policy from being blindly followed, the Company has improved the appointment/dismissal process for directors, including securing the independence of the Nomination Committee from business execution by including only independent outside directors in the committee and introducing evaluations of the CEO (votes of confidence). For the adequate monitoring of the management and effective supervision of executives, the Company has overhauled its organizational structure to allow its internal organs, such as the board and the audit committee, to fulfil their responsibilities. Such overhaul includes changes in the composition of the board and the audit committee and reinforcement of the information gathering system, holding of executive sessions among only independent outside directors, and exercise of the checking function in the process for making important decisions, etc. For the establishment of a corporate culture in which the internal departments and their officers and employees can carry out their primary responsibilities, the CEO continuously delivers messages to all personnel, to raise and instill awareness of compliance on a company-wide basis. The Company also provides effective training programs tailored to each department and position, and implements strict internal disciplinary measures against any violation of laws and regulations. ii) To implement risk analysis and evaluation before all important management decisions, the Company has revised its decision-making process by measures such as establishing a body dedicated to risk analysis and evaluation (utilizing the knowledge of external experts) and having the board to deliberate the analysis and evaluation of said body. iii) To conduct appropriate financial reporting independent from the pursuit of business, the Company reinforced the independence of its finance unit, including vesting the Nomination Committee with veto rights on the appointment/dismissal of the CFO and the CFO having the direct control over the finance unit of each business unit. To enhance the disclosure system, the Company has also reviewed the information transmission system, etc. pertaining to timely disclosure. iv) To improve management of subsidiaries, after clarifying the policies to manage subsidiaries according to risks, the Company has implemented measures including enhancement of the information collection system of risk-related information and implementation of effective monitoring of subsidiaries. (Conclusion) Based on the above, TSE recognizes that the Company’s internal management system, etc. has reasonably improved. Therefore, TSE has decided to cancel the stock's designation as a security on alert. Together with this decision, it will cancel the stock's designation as a security under supervision (examination). |
Current Designations of Securities Under Supervision & Securities to Be Delisted
Designation History of Securities Under Supervision & Securities to Be Delisted
Current Designations of Securities on Alert
Designation History of Designation of Securities on Alert
Designation History of Securities Under Supervision & Securities to Be Delisted
Current Designations of Securities on Alert
Designation History of Designation of Securities on Alert
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