After finding improper accounting on infrastructure projects, Toshiba Corp. withdrew its earnings forecasts for last year on Friday and said it won't pay a year-end dividend.
A third-party committee is being formed to further investigate the matter, the Tokyo-based company said Friday. The company had projected net income of ¥120 billion ($1 billion) on sales of ¥6.7 trillion in the year ending in March.
The company won't report earnings until at least next month, it said.
Toshiba, which makes nuclear reactors, computer memory chips and consumer electronics and controls Westinghouse Electric Co., also said it may have to revise earnings from fiscal year 2013 and earlier. The company's shares fell as much as 22 percent in early German trade.
"It's a negative for investors and quite an embarrassment for a major company like Toshiba to withdraw figures," said Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. "Accounting standards for infrastructure projects also tend to be vague, allowing for something like this to happen."
Toshiba announced the forecast withdrawal after the market closed in Tokyo. Its shares have fallen 5.7 percent in Tokyo trading since April 3, when the company said it was investigating possible accounting problems.
"Several construction projects have understated costs," said Aya Oshima, a spokeswoman for Toshiba. "The investigation so far included power systems, social infrastructure and community solutions units."
The units encompass nuclear, hydroelectric and wind-power equipment, air traffic control and railway systems, and urban infrastructure services that rely on big data.
Oshima said the magnitude of the earnings restatement and responsibility for the misstatements aren't yet clear.
Toshiba got about 11 percent of operating income from its power and social infrastructure business in the fiscal year that started April 1, 2013.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.