Toshiba expecting to book another big loss from accounting scandal

Toshiba expects to book a large first-half operating loss as it struggles to recover from a A$1.7 billion accounting scandal, fuelling concerns that it may need more drastic restructuring.

The grim outlook also adds pressure on the embattled electronics maker to decide whether to sue former management for negligence over accounting practices in a bid to avoid lawsuits from angry shareholders.

Toshiba said its operating loss would come in roughly around ¥90 billion (A$1 billion), and that it planned a ¥70 billion writedown for one of its subsidiaries. It will release detailed first-half results over the weekend.

Toshiba shares closed down 3.4 percent, compared with a 1.0 percent gain in the benchmark Nikkei index.

The company booked a full-year net loss of ¥37.8 billion (A$457 million) in its full-year results in September.

In an effort to emerge from the scandal, the laptops-to-nuclear power conglomerate said in late October that it had agreed to sell its image sensor business to Sony and overhaul its semiconductor business.

But Toshiba has a long road ahead as its accounting irregularities padded profits across a wide range of its businesses. It is expected to announce more restructuring steps, in such unprofitable areas as home appliances and PCs, later this month.

Sources close to the matter have said Toshiba is also considering suing former executives, including three former chief executives, over the accounting practices.

An independent panel investigating the former executives' role, if any, in the scandal is expected to make recommendations as early as next week.

It is rare for Japanese companies to sue former executives unless they are deemed to have been acting for personal greed.

"Lawsuits against former executives are expected to increase as Japan pushes companies to strengthen corporate governance," Kengo Nishiyama, senior strategist at Nomura Securities Co, said.

"Tougher action will be increasingly called upon when decisions by former executives are found to hurt their companies."