Toshiba Shares Plunge on Reported US Investigation

March 17,2016
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(Photo by Yuya Shino/Reuters)

(AFP)--Shares in troubled Toshiba plunged on Thursday following a report that the scandal-hit firm is under investigation by US authorities over allegations it hid $1.3 billion in losses at its nuclear power operations.

Bloomberg News, quoting unnamed sources, reported that the US Justice Department and the Securities and Exchange Commission are examining if any fraud occurred.

Toshiba's stock fell 8.8%in Tokyo to 190 yen in late afternoon trading following the probe report, reversing earlier gains of as much as 4.9%.

In December, Japan's Securities and Exchange Surveillance Commission said that Toshiba should be slapped with a record 7.37 billion yen ($66 million) fine over a profit-padding scheme that hammered the reputation of one of Japan's best-known firms.

Toshiba expects a whopping loss of about 710 billion yen for the year to March due to sagging global demand and the scandal, in which high-handed bosses for years systematically pushed their subordinates to cover-up weak financial figures.

In the wake of the scandal, Toshiba -- a vast conglomerate that makes everything from rice cookers to nuclear plants -- has ushered in thousands of job cuts and plans to sell various business units in a bid to revive itself.