* PwC did not approve Toshiba's April-Dec financial
* Management said difference with PwC on validity of past
(Recasts with source confirmation)
By Taiga Uranaka and Taro Fuse
TOKYO, April 26 Toshiba Corp, the
troubled Japanese conglomerate, wants to replace auditor
PricewaterhouseCoopers Aarata (PwC) to resolve an impasse over
full-year earnings and remain listed, two sources briefed on the
PricewaterhouseCoopers was hired in June last year as part
of major changes at Toshiba following a $1.3 billion accounting
scandal. Ernst & Young ShinNihon LLC, its auditor at the time,
was fined for failing to spot irregularities.
Months later, Toshiba announced a separate $6.3 billion
writedown after dramatic cost overruns at its U.S. nuclear
business. That has since prompted its Westinghouse nuclear unit
to file for bankruptcy, and Toshiba to put its prized memory
chip division on the block.
Toshiba and its auditor have been at odds since the surprise
writedown and earlier this month the company filed twice-delayed
business results without an endorsement from PwC, putting its
listing on the Tokyo Stock Exchange in jeopardy.
Toshiba needs shareholder approval to sack its auditor, but
Japanese companies are allowed to hire auditors temporarily if
the incumbent quits.
The sources, who cannot be named as discussions are not
public, said Toshiba was planning to remove PwC but gave no
Toshiba spokesman Yukihito Uchida said the company was
considering options, but nothing had been decided. A PwC
spokeswoman declined to comment.
The Nikkei business daily said Toshiba wanted to hire a
second-tier accounting firm, since the other two of the big
four, Deloitte Touche Tohmatsu and KPMG Azsa, have potential
conflicts of interest given past business deals.
At a news conference earlier this month, Chief Executive
Satoshi Tsunakawa had said there were irreconcilable differences
with the auditor over the validity of past reports.
The head of the audit committee, Ryoji Sato, had stopped
short, however, of announcing a change of auditor. There were,
he said, "various options".
Toshiba's auditors have questioned practices at
Westinghouse, where massive cost overruns at four nuclear
reactors under construction forced its Japanese parent to
estimate a $9 billion annual net loss. They continue to probe.
"Our investigation, which includes checking 600,000 e-mail
messages, did not find anything that would impact our accounting
reports. Even if we continue the investigation, the situation
won't change," CEO Tsunakawa said earlier this month, about the
decision to report without the auditor's approval.
Toshiba is currently working on a financial statement for
the year ended in March. The TSE's filing deadline is May 15 -
if Toshiba misses that, it could be delisted.
(Reporting by Taiga Uranaka in TOKYO Laharee Chatterjee in
BENGALURU; Editing by Stephen Coates and Clara Ferreira Marques)