Japanese tech company, Toshiba, could be delisted from at least two stock exchanges if it is deemed to have not improved its internal management system since its last review late last year.
The company told shareholders on 14 March that the two stock exchanges on which it is listed, the Tokyo Stock Exchange (TSE) and the Nagoya Stock Exchange (NSE), will review a submission on its internal management system and, if it has not improved since its last submission, the company’s stock will be delisted.
As a result of “inappropriate accounting” in the past, the company had previously been given notice that its stock would be designated as ‘Securities on Alert’, effective from September 15, 2015, in accordance with their Securities Listing Regulations.
Toshiba was given notice by the TSE and NSE at the time that improvements of its internal management system were “highly necessary”.
On 15 September last year, Toshiba submitted written confirmation of its internal management system to TSE and NSE.
This was examined by the exchanges which, in December last year, informed Toshiba that they would continue the ‘Securities on Alert’ designation, saying that they needed to further verify the implementation and progress of measures Toshiba had taken to improve its internal management systems.
Now, the company has resubmitted written confirmation of its internal management system to the two exchanges.
Given that the decision as to whether the company will be de-listed or not hinges on the exchanges’ review of the submission, the company’s stock has subsequently been additionally designated as ‘Securities Under Supervision (Examination)’.
“Toshiba deeply regrets that the designation of its stock as a Securities Under Supervision (Examination), and hereby apologises to its shareholders, investors and stakeholders for causing them great concern,” the company told shareholders.
“Toshiba will channel all its efforts, and those of Toshiba Group as a whole, into securing release from the current designation,” it said.
The most recent review of the company’s internal management system by the exchanges comes just days after the company requested, and was granted, its second extension to its third quarter securities report submission deadline.